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An Increase in Aggregate Demand Causes an Increase in ________

question 22

Multiple Choice

An increase in aggregate demand causes an increase in ________ only in the short run,but causes an increase in ________ in both the short run and the long run.


Definitions:

EAR

Effective Annual Rate (EAR) is a measure of interest that takes into account the effects of compounding over a given period.

Compounded Monthly

Interest calculated on an investment or loan each month based on both the initial principal and the accumulated interest from previous months.

EAR

Effective Annual Rate, a measure of interest that takes into account the effect of compounding over a year.

Compounded Quarterly

The process whereby the interest earned on an investment is calculated and added to the principal sum every three months, then the new total is used for the next compounding period.

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