In the Aggregate Demand/aggregate Supply Model,an Economy Operating Below Its

question 121

Multiple Choice

In the aggregate demand/aggregate supply model,an economy operating below its long-run potential capacity will experience

• A)falling real wages and resource prices that will increase SRAS,moving the economy back toward full employment.
• B)rising interest rates that will increase SRAS,moving the economy back toward full employment.
• C)inflation that will stimulate additional spending and thereby restore full employment.
• D)a prolonged economic depression unless consumer optimism is increased.

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Definitions:

ANOVA

Analysis of Variance, a statistical method used to compare the means of three or more samples to determine if at least one of the sample means is significantly different from the others.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution, used to estimate a population parameter.

Critical Value

A point on a statistical distribution that is compared with the test statistic to determine whether to reject the null hypothesis.

Test Statistic

A numerical value calculated from sample data, used in hypothesis testing to determine whether to reject the null hypothesis.