In the Short Run in Periods of Low Inflation, an Increase

question 61

Multiple Choice

In the short run in periods of low inflation, an increase in aggregate demand from a position of full employment leads to:

• A) higher prices and higher unemployment.
• B) higher prices and higher output.
• C) lower prices and higher output.
• D) lower prices and higher unemployment.

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Definitions:

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.

Securities and Exchange Act

A U.S. law enacted in 1934 to regulate securities transactions on the secondary market, thereby protecting investors and maintaining fair and efficient functioning of the securities markets.

New York Stock Exchange

A leading global securities exchange where stocks, bonds, and other financial instruments are traded, located in New York City.

FDIC

The Federal Deposit Insurance Corporation, a United States government agency that insures deposits at banks and savings associations.