Because the Short-Run Aggregate Expenditure Model Assumes That the Price

question 226

Multiple Choice

Because the short-run aggregate expenditure model assumes that the price level is ________, its predicted effect of changes in autonomous expenditure on equilibrium output is ________ than the prediction of the AD/SAS model.

• A) fixed; greater
• B) fixed; less
• C) flexible; greater
• D) flexible; less

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Definitions:

Concentration Ratios

A measure used in economics to assess the extent to which a market or industry is dominated by a few largest firms.

Total Industry Sales

The total revenue generated from all sales within a specific industry over a defined period of time.

Largest Firms

Companies that rank at the top within their industries by criteria such as revenue, market share, or employment size.

Mutual Interdependence

A situation in oligopoly markets where the actions of one firm significantly affect the outcomes of other competing firms.