In the Dynamic Aggregate Demand and Aggregate Supply Model, the Rate

question 131

Multiple Choice

In the dynamic aggregate demand and aggregate supply model, the rate of inflation will decrease if:

• A)AD shifts faster than AS.
• B)AS shifts slower than AD.
• C)AS shifts faster than AD.
• D)the price level falls.

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Definitions:

Competitive Industry

An industry characterized by many sellers, where no single company can control market prices.

Barriers To Entry

Factors that prevent or hinder companies from entering a particular market or industry.

Barriers To Exit

Factors that make it difficult or costly for a company to leave a market or industry.

Competitive Industry

An industry characterized by many firms competing with each other by offering similar products or services, typically resulting in benefits for consumers through lower prices and higher quality.