Suppose That the Aggregate Demand (ADI)curve in an Economy Is

question 124

Multiple Choice

Suppose that the aggregate demand (ADI) curve in an economy is Y = 20,000 - 20,000
,current inflation ( 11ec9ae2_bd79_1ce7_a39a_a9c7bc0c6307_TB34225555_11 ) equals 0.06 (6%) ,and potential output (Y*) equals 19,200.If,starting from long-run equilibrium,an inflation shock raises inflation to 8%,in the short run,output will equal ________ and,in the long run,output will equal _________

• A) 18,400;18,400
• B) 18,400;19,200
• C) 19,200;18,400
• D) 19,200;19,200
• E) 19,600;19,200

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Definitions:

Thyroid

The thyroid is a butterfly-shaped gland located in the neck, below the Adam's apple, producing hormones that regulate the body's metabolic rate, heart and digestive function, muscle control, brain development, and bone maintenance.

Cricoid

A ring-like cartilage located at the top of the trachea and below the thyroid cartilage, forming the back part of the larynx and providing attachment for muscles involved in opening and closing the airway.

Glottis

The opening between the vocal cords in the larynx, crucial for producing vocal sounds.

Positive Message

Communication that conveys favorable, optimistic, or encouraging information or sentiments.