Suppose We Are at the Natural Real GDP When the Aggregate

question 55

Multiple Choice

Suppose we are at the natural real GDP when the aggregate demand curve suddenly shifts downward.In Classical macroeconomics,the price level would ________,and real output would ________.

• A)remain unchanged,also remain unchanged
• B)remain unchanged,fall below natural real GDP until the aggregate demand curve shifts back up
• C)fall,fall briefly then return to natural real GDP
• D)fall,fall below natural real GDP until the aggregate demand curve shifts back up

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Definitions:

Income

The money received by an individual or entity in return for their labor, from transfers, or from investments.

Middle Three Quintiles

The middle three quintiles refer to the middle segments of a population when it is divided into five equal parts based on income or wealth, often used to represent the middle class.

Income Received

The total earnings obtained by individuals or entities, typically through employment, investments, or other sources, during a specified period.

Lower Two Quintiles

Refers to the bottom 40% of a population when it is divided into five equal groups according to income levels.