If the Economy Is in Macroeconomic Equilibrium with a Vertical

question 75

Multiple Choice

If the economy is in macroeconomic equilibrium with a vertical AS curve,and then aggregate demand decreases,we expect the AE function to shift to a

• A)higher level and stay there.
• B)higher level,but then shift part of the way down to its original position as the price level falls.
• C)higher level but then return to its original position as the price level falls.
• D)lower level and stay there.
• E)lower level,but then return to its original position as the price level falls.

---

Definitions:

Standard Error Of Estimate

A measure of the accuracy of predictions made with a regression line, specifically, it estimates the standard deviation of the error term.

Coefficient Of Determination

A measure used in statistical analysis to assess the goodness of fit of a model, represented as the proportion of variance in the dependent variable that is predictable from the independent variable(s).

Pearson Correlation Coefficient

A measure of the linear correlation between two variables X and Y, giving a value between -1 and 1 which indicates the strength and direction of the correlation.

Sum Of Squares

A statistical measure that quantifies the variation within a set of numbers, calculated as the sum of the squared differences from the mean.