Which of the Following Is True of the Short-Run Aggregate

question 3

Multiple Choice

Which of the following is true of the short-run aggregate supply curve?

• A)It shows the relation between the inflation rate and the quantity of aggregate output firms supply,other things constant.
• B)It shows the relation between the price of labor and the aggregate quantity of labor workers supply,other things constant.
• C)It shows the relation between the interest rate and the quantity of capital goods firms supply,other things constant.
• D)It shows the relation between the price level and the quantity of aggregate output firms supply,other things constant.
• E)It displays an inverse relationship between the price level and real GDP.

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Definitions:

Type I Error

A Type I error occurs when a true null hypothesis is incorrectly rejected.

Rejecting

The act of not accepting or dismissing a statistical hypothesis based on the analysis of data.

Level of Significance

The threshold probability used in hypothesis testing to determine whether to reject the null hypothesis.

Probability

A measure of the likelihood of occurrence of an event, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.