Other Things Equal, an Increase in the Price Level Will

question 108

Multiple Choice

Other things equal, an increase in the price level will:

• A)shift the short run aggregate supply curve to the right.
• B)shift the aggregate demand curve to the right.
• C)cause a movement up along a short-run aggregate supply curve.
• D)cause a movement down a short run aggregate supply curve.

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Definitions:

Representativeness Heuristic

A cognitive shortcut where people categorize situations or individuals based on how similar they are to typical cases or categories they know.

Prototypes

Original models or first forms from which subsequent forms are derived or developed; in psychology, widely accepted examples of a certain category.

Heuristic

A mental shortcut or rule of thumb that simplifies decision-making but may not always lead to optimal outcomes.

Framing

How information is presented affects how that information is perceived and influences decisions.