If Aggregate Demand and Nominal GDP Increase While the Price

question 105

Multiple Choice

If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that

• A) the economy is already at full employment.
• B) the aggregate supply curve is upward sloping.
• C) the aggregate supply curve is horizontal.
• D) the aggregate demand curve is vertical.

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Definitions:

Direct Correlation

A positive correlation where the values of both variables change in the same direction.

Two-tailed Test

A statistical hypothesis test in which the area of rejection is on both ends of the sampling distribution, allowing for the investigation of deviations in two opposite directions.

Prediction

The act of forecasting or estimating future values or outcomes based on current or past data.

Correlation Coefficient

A numerical measure that quantifies the degree and direction of the relationship between two variables.