In the Short Run,an Increase in Investment,ceteris Paribus,shifts the

question 16

Multiple Choice

In the short run,an increase in investment,ceteris paribus,shifts the

• A) AD curve to the right,causing equilibrium price level to rise and equilibrium Real GDP to increase.
• B) AD curve to the left,causing equilibrium price level to fall and equilibrium Real GDP to decrease.
• C) SRAS curve to the right,causing equilibrium price level to fall and equilibrium Real GDP to increase.
• D) SRAS curve to the left,causing equilibrium price level to rise and equilibrium Real GDP to decrease.

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Definitions:

Price-Inelastic

A characteristic of a product or service whose demand does not significantly change with a change in its price.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Luxury

Goods or services that are considered non-essential but desirable and associated with high-quality and high price.

Defensive Medicine

The practice by healthcare providers of ordering tests, treatments, or procedures to protect themselves from potential malpractice lawsuits, rather than to benefit the patient.