In the Short Run,an Increase in Investment,ceteris Paribus,shifts the

question 16

Multiple Choice

In the short run,an increase in investment,ceteris paribus,shifts the

• A) AD curve to the right,causing equilibrium price level to rise and equilibrium Real GDP to increase.
• B) AD curve to the left,causing equilibrium price level to fall and equilibrium Real GDP to decrease.
• C) SRAS curve to the right,causing equilibrium price level to fall and equilibrium Real GDP to increase.
• D) SRAS curve to the left,causing equilibrium price level to rise and equilibrium Real GDP to decrease.

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Definitions:

Structural Unemployment

A situation in which there is a mismatch between the skills of unemployed workers and the skills needed for available jobs.

Cyclical Unemployment

This type of unemployment fluctuates with the business cycle, increasing during economic downturns and decreasing during periods of economic growth.

Frictional Unemployment

Short-term unemployment that arises from the process of matching workers with jobs and occurs even in healthy economies.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product much more efficiently than with individual craftsmanship.