Based on Your Understanding of the AS / AD Model,which

question 59

Multiple Choice

Based on your understanding of the AS / AD model,which of the following is an INCORRECT statement about the short-run adjustment process for the macroeconomy?

• A)output in excess of the natural level leads to higher prices.
• B)a reduction in employment leads to lower prices.
• C)an increase in demand increases output.
• D)an increase in output above the natural level leads to higher nominal wages.
• E)none of the above

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Definitions:

Undependable

Not reliable or trustworthy; likely to fail or disappoint.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and underestimate situational factors when explaining others' behaviors.

Overemphasized

To give too much importance or emphasis to something, potentially skewing perspective or interpretation.

Ignored

The act of deliberately paying no attention or giving no recognition to someone or something.