When the AD and SAS Curves Intersect at a Level

question 380

Multiple Choice

When the AD and SAS curves intersect at a level of real GDP which exceeds potential GDP and there is no government policy undertaken,which of the following will occur?

• A) The AD curve shifts rightward because the Fed decreases the money supply.
• B) The SAS curve shifts leftward because the money wage rate rises.
• C) The AS curve shifts leftward because the money wage rate falls.
• D) The AD curve shifts leftward because the money wage rate rises.

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Definitions:

Biased Estimator

An estimator that, on average, does not equal the true parameter of the population, indicating a systematic error in estimation.

Population Parameter

A numerical value summarizing a characteristic of an entire population, such as mean or variance.

Efficient Estimator

An estimator that achieves the lowest possible variance among all unbiased estimators for a parameter of interest.

Random Sample

A sample drawn from a population in such a way that every individual has an equal chance of being selected, ensuring the sample's representativeness.