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:

Basilar Membrane

A key structure in the cochlea of the inner ear, which plays a critical role in the sensory processing of sound through its vibration.

Oval Window

A membrane-covered opening located at the base of the stapes bone in the middle ear that transmits sound vibrations to the cochlea.

Moon Illusion

A visual phenomenon which causes the Moon to appear larger near the horizon than it does higher up in the sky.

Texture Gradient

A depth cue based on the gradual reduction of detail that occurs in surfaces as they recede from the observer, suggesting distance.