If a Macroeconomic Model Consists of Upward-Sloping Short-Run Aggregate Supply

question 9

Multiple Choice

If a macroeconomic model consists of upward-sloping short-run aggregate supply and downward-sloping aggregate demand,can it possibly generate a constant real GDP with no business cycles over time?

• A)No,only a vertical short-run aggregate supply curve can produce that result.
• B)No,only a horizontal short-run aggregate supply curve can produce that result.
• C)Yes,but the short-run aggregate supply curve must never shift.
• D)Yes,if the aggregate demand and short-run aggregate supply curves shift in perfect unison.

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Definitions:

Demand Uncertainty

Refers to the unpredictable nature and variability of customer demand for products or services, making it challenging to plan effectively.

Product Availability

Refers to the extent to which goods or services can be bought from a company at any given time.

Cost of Stocking Out

The financial loss and potential customer dissatisfaction resulting from insufficient inventory to meet demand.

Cutaneous Membrane

The skin, the largest organ of the body, serving as a protective barrier against environmental hazards and pathogens, and involved in sensation and temperature regulation.