Exhibit 14-2 Aggregate Demand and Supply

question 29

Multiple Choice

Exhibit 14-2 Aggregate demand and supply

-In Exhibit 14-2,if aggregate demand shifts from AD₁ to AD₃,real GDP will:

• A)increase from $3 to $4 and the price level will increase from 100 to 140.
• B)increase from $3 to $7 and the price level will increase from 100 to 140.
• C)increase from $3 to $4 and the price level does not change.
• D)increase from $3 to $7 and the price level will increase from 100 to 120.
• E)not change and the price level will increase from 100 to 140.

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Definitions:

Absolute Distance

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Behavior-Based Interview

An interviewing technique that focuses on how the interviewee acted in specific situations in the past, on the premise that past behavior is the best predictor of future behavior.