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

question 31

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.
• E) both a and d.

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Definitions:

Shape

Describes the geometric or visual characteristics of an object or distribution, such as symmetry, skewness, or roundness.

Multinomial Experiment

An experiment consisting of a fixed number of trials where each trial has multiple possible outcomes.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists within a set of given observations or parameters.

Level of Significance

The probability of rejecting the null hypothesis when it is actually true, typically denoted as alpha (α).