If the Economy Is Operating at a Point at Which

question 164

Multiple Choice

If the economy is operating at a point at which short-run aggregate supply is horizontal, then

• A) real GDP cannot expand.
• B) real GDP cannot contract.
• C) increases in aggregate demand do not increase the price level.
• D) then increases in aggregate demand do not increase real GDP.

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Definitions:

Sensory Evidence

Information obtained through the senses, which form the basis of empirical knowledge and understanding of the environment.

Innate Ideas

Concepts that are purportedly present in the mind from birth, rather than acquired through experience or learning.

Inscrutable

Something that is impossible to understand or interpret; incomprehensible.

Quine

Willard Van Orman Quine was an American philosopher and logician known for his work in logic, language, epistemology, and philosophy of science.