Beginning at a Long-Run Equilibrium, an Increase in Aggregate Demand

question 10

Multiple Choice

Beginning at a long-run equilibrium, an increase in aggregate demand

• A)increases the price level and in the long run increases real GDP.
• B)increases the price level and in the long run decreases real GDP.
• C)decreases the price level and in the long run increases real GDP.
• D)decreases the price level and in the long run decreases real GDP.
• E)increases the price level, but in the long run there is no change in real GDP.

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Definitions:

Unrealistically Low Expectations

Expectations that are set significantly below a realistic assessment of achievable outcomes, often leading to underperformance or missed opportunities.

Psychological Contract Breach

The perception that an employer has failed to fulfill one or more unwritten expectations of the employment relationship.

Unrealistically High

Describes expectations or objectives that are excessively beyond realistic reach or achievement.

Psychological Contract Breach

A perception that one's employer has failed to fulfill one or more obligations within the unwritten agreement of the psychological contract.