If Current Output Deviates from Potential Output, the Short-Run Aggregate

question 8

Multiple Choice

If current output deviates from potential output, the short-run aggregate supply curve may shift because:

• A)aggregate demand has to shift.
• B)potential output will have to shift.
• C)input costs (including wages) adjust.
• D)the economy's long-run growth rate will have to adjust.

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Definitions:

Lithography

A printmaking technique in which the artist uses an oil-based crayon to draw directly on a stone plate and then wipes water onto the stone. When ink is rolled onto the plate, it adheres only to the drawing. The print produced by this method is a lithograph.

Thomas Cole

An American artist and founder of the Hudson River School, known for his landscape paintings that express romanticism and naturalism.

The Oxbow

A landscape painting by Thomas Cole, depicting a dramatic bend in the Connecticut River.

Wilderness

An area of natural land, often undeveloped and uninhabited by humans, that retains its primeval character and natural conditions, sometimes also preserved and protected for environmental reasons.