On the Long-Run Aggregate Supply Curve

question 122

Multiple Choice

On the long-run aggregate supply curve,

• A)an increase in the price level increases the aggregate quantity of GDP supplied.
• B)an increase in the price level reduces the aggregate quantity of GDP supplied.
• C)an increase in the price level has no effect on the aggregate quantity of GDP supplied.
• D)an increase in the price level increases the level of potential GDP.
• E)an increase in the price level increases the aggregate quantity GDP demanded.

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Definitions:

Index Arbitrage

A trading strategy that attempts to profit from the differences between actual and theoretical futures prices of the same stock index.

Actual Future Prices

The real prices at which assets, commodities, or securities will be traded in the future, as opposed to predicted or estimated prices.

Theoretically Correct

A term indicating that something is consistent with theory or established principles, often used in academic or scientific contexts.

Differences

The distinctions or variations between two or more entities or items, highlighting how they are not identical.