If Society Wants Aggregate Demand to Increase Without Changes in the Price

question 65

Multiple Choice

If society wants aggregate demand to increase without changes in the price level, then there must be

• A) a gap between full employment and the current level of real GDP and an increase in autonomous spending.
• B) an increase in autonomous spending combined with an increase in the marginal propensity to save.
• C) an increase in autonomous saving so that autonomous investment spending can increase.
• D) an increase in autonomous spending and a horizontal short-run aggregate supply curve.

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Definitions:

Estimate Time

Approximating the duration that a task or activity is expected to take.

Geometric Sequence

A sequence of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the ratio.

Common Ratio

In a geometric sequence, the constant factor between consecutive terms, used to calculate subsequent terms.

Geometric Sequence

A sequence of numbers where each term is found by multiplying the previous term by a constant called the common ratio.