An Increase in Aggregate Demand Will Have a Smaller Long-Run

question 7

Multiple Choice

An increase in aggregate demand will have a smaller long-run effect on real GDP if the:

• A)aggregate demand curve is flat.
• B)short-run aggregate supply curve is horizontal.
• C)economy is well below potential output.
• D)economy is already at potential output.
• E)aggregate demand curve is fairly steep.

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Definitions:

Samples

Selected groups or portions of a population used in research to draw conclusions about the overall population based on their characteristics or responses.

Standard Deviation

A statistical measure that quantifies the variation or dispersion of a set of data points relative to its mean.

Mean

A statistical measure representing the average of a set of numbers, calculated by dividing the sum of all values by the number of values.

Performance Levels

Measures or ratings used to evaluate the effectiveness, quality, or achievements of an individual or organization in specific tasks or goals.