The AD-AS Model Predicts That a Positive AD Shock Will

question 51

Multiple Choice

The AD-AS model predicts that a positive AD shock will cause the price level to ___________,from the initial to a new long-run equilibrium level.But the model is silent about how fast the price level will ___________ from the initial to the new level;the model cannot explain ___________.

• A) increase;increase;the inflation rate
• B) increase;increase;the price level
• C) decrease;decrease;the inflation rate
• D) increase;increase;stagflation
• E) decrease;decrease;the price level

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Definitions:

Junior Team

A group or team composed of younger or less experienced members, often designated in sports and organizations for development and training purposes.

Framing

The perspective or manner in which information is presented, which can influence perception and decision-making.

Significant Amounts

Quantities or volumes that are large enough to be noteworthy or have a considerable impact or importance in a specific context.

Linguistic Relativity Hypothesis

The theory that the structure of a language influences its speakers' worldview or cognition, suggesting that language affects thought processes.