According to Modern Keynesian Analysis, an Increase in Aggregate Demand

question 226

Multiple Choice

According to modern Keynesian analysis, an increase in aggregate demand leads to a higher price level because the

• A) aggregate demand curve is upward sloping.
• B) short-run aggregate supply curve is upward sloping.
• C) aggregate demand curve is upward horizontal.
• D) short-run aggregate supply curve is vertical.

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Definitions:

Annual Merit Raise

An increase in salary given yearly based on an employee's performance evaluation.

Performance Appraisal

The systematic evaluation of an employee's performance on the job, typically including both qualitative and quantitative assessments.

Base Pay

The initial salary or wage given to an employee excluding any extra benefits, bonuses, or raises, which serves as the foundation for total compensation.

Pay Raise

An increase in an employee's salary or wages, often awarded for merit, length of service, or to adjust for inflation.