If an Economy at Potential GDP Experiences a Demand Shock

question 370

Multiple Choice

If an economy at potential GDP experiences a demand shock that shifts the aggregate demand curve rightward, there will be

• A) an eventual leftward shift in the short-run aggregate supply curve.
• B) unemployment below the natural rate.
• C) upward pressure on money wage rates.
• D) All of the above answers are correct.

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Definitions:

Interposition

A visual cue to depth that occurs when one object partially blocks another, indicating that the blocking object is closer.

Motion Parallax

A depth cue based on the fact that, as an observer moves, the retinal images of nearby objects move more rapidly than do the retinal images of objects farther away.

Binocular Disparity

The difference in the images received by the two eyes due to their different perspectives, which contributes to depth perception and stereopsis.

Eyes Distance

This term typically refers to the measurement between the centers of the pupils of the two eyes, important in optical and vision sciences.