Assume That the AD Curve Is Held Constant and Short-Run

question 11

Multiple Choice

Assume that the AD curve is held constant and short-run aggregate supply decreases.The result is a(n) :

• A)increase in both equilibrium real GDP and the price level.
• B)decrease in equilibrium real GDP and an increase in the price level.
• C)decrease in both equilibrium real GDP and the price level.
• D)decrease in equilibrium real GDP, while the price level remains fixed.
• E)increase in the price level, while equilibrium real GDP remains fixed.

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Definitions:

Return On Equity

A financial ratio indicating the profitability of a firm in relation to its shareholders' equity, measuring how much profit is generated from the equity.

Return On Equity

calculates the amount of net income returned as a percentage of shareholders equity, measuring a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Common Stock

A form of equity security signifying an ownership stake in a company, granting the holder the right to participate in voting on corporate issues and to earn dividends.

Market Price

The present rate at which a service or asset is available for purchase or sale on an open market.