Which of the Following Is Not an Assumption Made by the Dynamic

question 235

Multiple Choice

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

• A)Potential real GDP increases continuously.
• B)The aggregate demand curve shifts to the right during most periods.
• C)The short-run aggregate supply curve shifts to the right except during periods when workers and firms expect higher wages.
• D)Aggregate demand and potential real GDP decrease continuously.

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Definitions:

Memory Consolidation Theory

The Memory Consolidation Theory postulates that stable, long-term memories are formed from the transfer and reorganization of short-term memories during specific brain states.

Wish-Fulfillment Theory

A psychological concept proposed by Sigmund Freud suggesting that dreams represent the fulfillment of unconscious desires or wishes.

Information-Processing Theory

An approach to understanding how the human mind transforms sensory information, viewing the brain as a complex processing system that encodes, stores, and retrieves information.

Neural Activation Theory

A hypothesis explaining how neural circuits in the brain are activated to form memories or responses; often used in discussions of learning and memory. [Note: This is a conceptual rephrasing. The term "Neural Activation Theory" might not directly refer to a well-established theory by this precise name, but the description fits general understanding of how neural activation underpins cognitive functions.]