Suppose the Economy Is on the Intermediate Range of the Aggregate

question 113

Multiple Choice

Suppose the economy is on the intermediate range of the aggregate supply curve.Which of the following would reduce both real GDP and the price level?

• A) A decrease in aggregate supply.
• B) An increase in aggregate supply.
• C) A decrease in aggregate demand.
• D) An increase in aggregate demand.

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Definitions:

Directional Hypothesis

A hypothesis that specifies the direction of the expected difference or relationship between variables.

Null Hypothesis

A default statement that indicates no effect or no difference, used as a starting point for statistical hypothesis testing.

Directional Hypothesis

A hypothesis that outlines the anticipated direction of the difference or relationship.

Critical Value

A threshold in a statistical test that defines the boundary for deciding whether an observed statistic is extreme enough to reject the null hypothesis.