Suppose ,And A¯im = 0.20.For Any Given

question 70

Multiple Choice

Suppose
,
,
,
,and a¯im = 0.20.For any given
,
Equals __________ and the economy __________.

• A)0.00;is in its long-run equilibrium
• B)1.05;has experienced a positive aggregate demand shock
• C)0.45;has experienced a positive aggregate demand shock
• D)-0.15;has experienced a negative aggregate demand shock
• E)0.05;has experienced a positive aggregate demand shock

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Definitions:

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that same good, reflecting consumers' sensitivity to price changes.

First Law of Demand

The principle that there is an inverse relationship between the price of a good and the quantity demanded, all else being equal.

Quantity Demanded

The amount of a product that consumers are willing and able to purchase at a given price.

Price Falls

A decrease in the cost of goods or services in the market.