-In the Above Figure, If the Relevant Aggregate Demand Curve

question 312

Multiple Choice

-In the above figure, if the relevant aggregate demand curve is AD₂, what are the short-run equilibrium price level and real GDP?

• A)130 and $12 trillion
• B)130 and $11.5 trillion
• C)120 and $11.5 trillion
• D)120 and $12 trillion

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Definitions:

Mental Set

A psychological tendency to approach problems in a specific way, using methods that have been successful in the past.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering the ability to think of alternative uses.

Intelligence

The ability to acquire and apply knowledge and skills.

Level Of Intelligence

A measure of an individual's cognitive capabilities, including the ability to learn, understand, and apply knowledge effectively.