-Refer to Figure 15-6

question 37

Multiple Choice

-Refer to Figure 15-6.If the price level is currently at 140,what would we expect to occur in the short run?

• A) The price level will remain at 140 and businesses will cut production to $5.5 trillion.
• B) The price level will remain at 140 and the extra $2 trillion in real GDP will be saved for future use.
• C) The aggregate supply curve will shift upward until it intersects the aggregate demand curve at a price level of 140 and real GDP of $5.5 trillion.
• D) The aggregate demand curve will shift right until it intersects the aggregate supply curve at a price level of 140 and real GDP of $7.5 trillion.
• E) Inventories will accumulate and businesses will cut production until equilibrium is reached at a price level of 120 and real GDP of $6.5 trillion.

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Definitions:

P-value

The odds of encountering test findings that are equally or more extreme than the observed ones, with the null hypothesis assumed to be valid.

Null Hypothesis

A hypothesis that assumes no significant difference or effect in a population parameter or between populations, typically tested against an alternative hypothesis.

Slope

In mathematics, the slope is the measure of the steepness or incline of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Regression Line

A line drawn through the set of datapoints that represents the best fit of the data according to a particular statistical criterion, often used in linear regression analysis.