If Persistent Inflation Was Due to Declines in Long-Run Aggregate

question 231

Multiple Choice

If persistent inflation was due to declines in long-run aggregate supply, what pattern would be observed?

• A) Increases in the price level would occur simultaneously with decreases in real GDP.
• B) Increases in the price level would occur simultaneously with increases in real GDP.
• C) Only prices of goods would increase; prices of services would remain constant.
• D) Only prices of services would increase; prices of goods would remain constant.

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Definitions:

Uranium Atoms

The basic units of the chemical element Uranium, known for their radioactive properties and used as fuel in nuclear power plants.

Uranium Metal

A heavy, dense metal that is radioactive and used primarily as fuel in nuclear reactors.

Protons

Positively charged particles found in the nucleus of an atom, contributing to the atom's mass and atomic number.

Isotope

Variants of a chemical element that have the same number of protons but different numbers of neutrons in their atoms, affecting their atomic mass but not their chemical properties.