A Negative Demand Shock,holding Everything Else Constant

question 51

Multiple Choice

A negative demand shock,holding everything else constant:

• A) shifts AD to the left and results in lower aggregate price levels and lower real GDP in the short run.
• B) shifts AS to the left and results in lower aggregate price levels and lower real GDP in the short run.
• C) moves the economy downward along the AD curve.
• D) moves the economy upward along the AD curve.

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Definitions:

Test Situation

A controlled environment or condition in which experimental or diagnostic tests are conducted.

Coffee Shop

A retail establishment that serves coffee and other beverages, often providing a comfortable atmosphere for socializing or work.

Supermarket Chain

A group of retail grocery stores under the same brand and management, operating in multiple locations.

Significance Level

The probability of rejecting the null hypothesis when it is true; a measure of the risk of incorrect rejection.