If the Economy Is Initially in Short-Run Equilibrium and Then

question 32

Multiple Choice

If the economy is initially in short-run equilibrium and then experiences a positive demand shock,real GDP will ________ relative to potential GDP and the real interest rate will ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease

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Definitions:

Sample

A subset of individuals or observations taken from a larger population, used for statistical analysis.

Seniors

Older adults, often used to refer to the elderly population or to students in their final year of high school or college.

Grade Distribution

The spreading out of marks achieved by students in a course, often visualized using graphs or tables to understand the performance and grading trends.

Significance Level

The threshold below which the p-value of a statistical test must fall for the null hypothesis to be rejected, indicating statistical significance.