Aggregate Demand and Supply Analysis

question 11

Multiple Choice

Aggregate Demand and Supply Analysis
-In the figure above,assume that output is $10.5 trillion,while potential output is $12 trillion.If a fiscal stimulus package is implemented quickly,raising output to $12 trillion,while inflation remains constant at one percent,then the figure implies that the real interest rate will be ________ percent.

• A)1.5
• B)zero
• C)one
• D)0.5
• E)2.5

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Definitions:

Heart Rate

The speed at which the heart beats, typically expressed as beats per minute (bpm).

Blood Pressure

The pressure of circulating blood on the walls of blood vessels, often measured for health assessment.

Dopamine

A neurotransmitter involved in the regulation of movement, emotion, cognition, motivation, and feelings of pleasure.

Methamphetamine

A powerful, highly addictive stimulant that affects the central nervous system, known for its use both medically and as a recreational drug.