When Using the AD-AS Model to Understand Business Cycles, the Question

question 4

Multiple Choice

When using the AD-AS model to understand business cycles, the question, "what are the fundamental causes of business cycles?" can be thought of as the question:

• A)"what factors move the economy away from long-run equilibrium?"
• B)"what factors move aggregate demand and aggregate supply in different directions?"
• C)"what factors increase or decrease potential GDP?"
• D)"what factors increase or decrease the expected rate of inflation?"

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Definitions:

Survival

The process of continuing to live or exist, often despite hardship or danger.

Malnourished

The condition of having inadequate nutrition, either because of insufficient intake of calories or essential nutrients, or improper absorption.

Neurological Deficits

Impairments or losses in function related to areas of the nervous system, affecting physical and cognitive abilities.

Complications

Unexpected problems or conditions that develop following a procedure, treatment, or illness, making the situation more difficult to manage.