Which of the Following Statements Concerning the Long-Run Aggregate Demand

question 30

Multiple Choice

Which of the following statements concerning the long-run aggregate demand and supply model is true?

• A) An increase in aggregate demand increases real GDP only temporarily.
• B) An increase in aggregate demand increases real GDP by a multiple of the initial increase in expenditures.
• C) Prices are fixed.
• D) Output change that results from a change in aggregate demand is a permanent effect.
• E) A change in aggregate demand leads to a permanent change of higher output.

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Definitions:

Sensory Organs

Specialized organs of the body that are designed to receive and process sensory information, such as eyes for vision and ears for hearing.

Weber's Constant

A principle in psychophysics stating that the smallest perceptible change in a stimulus is proportional to the original intensity of the stimulus.

Light

A form of electromagnetic radiation visible to the human eye, responsible for the sense of sight.

Absolute Threshold

The minimum stimulus intensity that an organism can detect at least 50% of the time.