If Both the Price Level and Nominal Incomes Change by the Same

question 20

Multiple Choice

If both the price level and nominal incomes change by the same percentage:

• A) real GDP will remain constant.
• B) the aggregate supply curve will be upward-sloping.
• C) profit margins will change in real terms.
• D) the long-run aggregate supply curve will be horizontal.

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Definitions:

Cognitive Development

Refers to the progression of thinking, problem solving, and decision-making abilities from infancy through adulthood.

Maturation

The process of development in which an individual matures or reaches physical or psychological maturity.

Cultural Factors

Elements, such as beliefs, practices, and norms, that shape and influence the behavior and attitudes of a group of people within a society.

Authoritarian

A style of leadership or governance that is characterized by strict obedience to authority at the expense of personal freedom.