The Steeper the Short-Run Aggregate Supply Curve,the __________ the Change

question 101

Multiple Choice

The steeper the short-run aggregate supply curve,the __________ the change in price level and the __________ the change in real Gross Domestic Product for a given shift in the aggregate demand curve.

• A)larger; larger
• B)larger; smaller
• C)smaller; larger
• D)smaller; smaller
• E)real GDP and the price level are not affected by the shape of the aggregate supply curve

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Definitions:

CPI

The Consumer Price Index is a gauge that assesses the combined average cost of a variety of essential consumer items and services like healthcare, food, and transport, factoring in their weighted value.

Producer Price Index

Measure of the aggregate price level for intermediate products and wholesale goods.

Real Price

The price of a good or service after adjusting for inflation, reflecting its purchasing power over time.

Consumer Price Index

A metric that tracks the average fluctuation in prices urban consumers pay for a selection of consumer products and services over time.