In the Aggregate Demand-Aggregate Supply Model, Everything Else Remaining Unchanged

question 61

Multiple Choice

In the aggregate demand-aggregate supply model, everything else remaining unchanged, an increase in capital stock shifts the_____ to the_____ .

• A)long-run aggregate supply; right
• B)aggregate demand; right
• C)short-run aggregate supply; left
• D)aggregate demand; left

---

Definitions:

Normal Good

A normal good is a type of good for which demand increases when income increases and decreases when income decreases, assuming all other factors remain constant.

Inferior Good

A type of good for which demand decreases as the income of individuals increases, conversely, its demand increases when consumer income declines.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, contrasting with normal goods.

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.