In the Dynamic Aggregated Demand and Aggregate Supply Model,inflation Occurs

question 108

Multiple Choice

In the dynamic aggregated demand and aggregate supply model,inflation occurs if

• A)AD shifts faster than SRAS.
• B)AD shifts slower than SRAS.
• C)SRAS shifts faster than AD.
• D)LRAS shifts faster than AD.

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Definitions:

Economic Efficiency

A condition in which resources are allocated in such a way that maximizes the net benefit to society, ensuring that goods and services are produced and distributed in the most cost-effective manner.

Import Quotas

Limits set by a government on the quantity of a certain good that can be imported into a country, used to protect domestic industries.

Tariffs

A tax imposed by a government on goods and services imported from other countries, affecting the price and availability of those items.

Foreign-Produced Automobiles

Cars and other types of vehicles that are manufactured outside of a country's borders and then imported for sale.