Which of the Following Is Not an Assumption Made by the Dynamic

question 235

Multiple Choice

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

• A)Potential real GDP increases continuously.
• B)The aggregate demand curve shifts to the right during most periods.
• C)The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages.
• D)Aggregate demand and potential real GDP decrease continuously.

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Definitions:

Semi-

A prefix meaning half or partially, often used to indicate that something is incomplete or limited.

Semilunar

Shaped like a half-moon or crescent; often used to describe certain valves or cartilages in the human body that have a crescent shape.

Half

Refers to one of two equal parts into which something is or can be divided.

Centi-

A prefix denoting a factor of one hundredth (1/100) in the metric system.