When the Short-Run Aggregate Supply Curve Is Steep,then for a Given

question 132

Multiple Choice

When the short-run aggregate supply curve is steep,then for a given increase in aggregate demand:

• A)the increase in real GDP will be relatively small and the increase in the price level will be relatively large.
• B)the increase in real GDP will be relatively large and the increase in the price level will be relatively small.
• C)the increase in both real GDP and the price level will be large.
• D)the increase in both real GDP and the price level will be small.
• E)the decrease in real GDP will be larger than the decrease in the price level.

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Definitions:

Money Supply

The total financial capital in an economy at a given point in time, including the accumulation of cash, coins, and balances in checking and savings accounts.

Coordinate System

A system of geometry where the position of points on a plane is described using an ordered pair of numbers.

Quantities

The amounts or levels of a good or service available or required in various contexts, such as in markets or in production processes.

Prices

Amounts of money required to purchase goods or services, acting as an indicator of the value placed on those goods or services by the market.