In the AS/AD Framework, the Financial Friction Appears as A

question 70

Multiple Choice

In the AS/AD framework, the financial friction appears as a:

• A) negative demand shock.
• B) negative supply shock.
• C) change in the long-run real interest rate.
• D) positive supply shock.
• E) The financial friction is only present in the IS/MP model.

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Definitions:

Median

The middle value of a data set, where half the numbers are below and half are above this value.

Mean

The average of a set of numbers, calculated by summing all the numbers and then dividing by the count of those numbers.

Frequency Distribution

A summary of data showing how often each value occurs.

Mean

The average value obtained by dividing the sum of all values in a data set by the number of values.