Which of the Following Is an Assumption Made by the Dynamic

question 216

Multiple Choice

Which of the following is an assumption made by the dynamic model of aggregate demand and aggregate supply?

• A)Aggregate demand and potential real GDP decrease continuously.
• B)The aggregate demand curve shifts to the right except during periods when workers and firms expect higher wages.
• C)Potential real GDP increases continuously during economic expansions and decreases continuously during economic recessions.
• D)The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages.

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Definitions:

Method Of Loci

A mnemonic technique that associates information with specific physical locations, enhancing memory recall.

Visual Images

Refers to pictures or scenes that are created in the mind or seen by the eyes, encapsulating both physical and mental visual experiences.

Familiar Place

A location known to an individual through previous experience or frequent visitation, evoking recognition and often comfort.

Forgetting Curves

A graphical representation of how information is lost over time when there is no attempt to retain it.