Consider the Following Two Headlines Appearing in the Same Day

question 50

Multiple Choice

Consider the following two headlines appearing in the same day: "Federal government announces major new infrastructure investments" and "New technology drives down transport costs." Choose the statement below that best describes the likely macroeconomic effects.

• A)The AS curve shifts to the left; the price level rises and real GDP falls.
• B)The AS curve shifts to the right; the price level falls and real GDP rises.
• C)The AD curve shifts to the left; the price level falls and real GDP falls.
• D)The AD curve shifts to the right; the price level rises and real GDP rises.
• E)The AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP rises.

---

Definitions:

Scrap

Material that is discarded or deemed as waste during the manufacturing process, often due to defects, excess, or irrelevance to the final product.

Obsolescence

The process of becoming outdated or no longer used, often because of the introduction of newer and more effective technologies or products.

Safety Stock

An additional quantity of an item held in inventory in order to reduce the risk that the item will be out of stock.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, indicating how spread out the data points are.