A Simultaneous Rise in Aggregate Demand and Fall in Short-Run

question 8

Multiple Choice

A simultaneous rise in aggregate demand and fall in short-run aggregate supply will definitely

• A) raise the price level,but there is not enough information to know how Real GDP will change.
• B) lower Real GDP,but there is not enough information to know how the price level will change.
• C) raise the price level and Real GDP.
• D) raise Real GDP,but there is not enough information to know how the price level will change.
• E) raise the price level and lower Real GDP.

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Definitions:

Association

A statistical term indicating a relationship or linkage between two or more variables, without implying causation.

Linear Association

A relationship between two variables where the rate of change in one variable is constant with respect to the other.

Scatterplot

A type of graph in statistics used to display values for two variables for a set of data, showing the relation between them.

Histogram

A graphical representation of the distribution of numerical data, where the data is grouped into ranges and represented as bars.