When the Economy Is Operating at a Point Where Aggregate

question 61

Multiple Choice

When the economy is operating at a point where aggregate demand equals short-run aggregate supply, it must be true that:

• A) aggregate demand also equals long-run aggregate supply.
• B) the short-run level of output is not the same as long-run potential output.
• C) prices are higher than expected prices.
• D) None of these must be true.

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Definitions:

Understory Layers

Refers to the vegetation layer in a forest that grows at a lower height under the forest canopy, consisting of shrubs, young trees, and ground cover plants.

Vegetation

Plant life or total plant cover in an area, encompassing the variety of plant species and their abundance.

Tropical Grassland

A biome characterized by tall grasses, occasional trees, and a warm climate, receiving more seasonal rainfall than a desert but less than a tropical rainforest.

Very Dry

A condition of extremely low moisture content, often used to describe climates, environments, or substances lacking in water.