The Flatter the SP Curve

question 66

Multiple Choice

The flatter the SP curve

• A)the greater will be the shift in the SP.
• B)the greater will be the change in inflation and the smaller will be the change in real GDP for any given change in nominal GDP growth.
• C)the greater will be the change in real GDP and the smaller will be the change in inflation for any given change in nominal GDP growth.
• D)the greater will be the growth of nominal GDP.

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Definitions:

Market System

An economic approach wherein the processes of investment, manufacturing, and goods distribution are directed by supply-demand correlation, with a system that freely sets the prices of goods and services.

Prices

The amount of money required to purchase goods or services, indicating the value that consumers are willing to pay and sellers are willing to accept.

Industry

A sector of the economy that includes all businesses involved in the production or processing of goods, provision of services, or related activities.

Market System

In this economic structure, supply and demand forces directly influence decisions around investment, production capacity, and distribution methods, with the price points of goods and services being freely determined in a competitive price system.