Beginning at Long-Run Equilibrium in the Dynamic Model of Aggregate

question 92

Multiple Choice

Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, in the periods after a multiperiod positive demand shock occurs, the DAS shifts upward because:

• A) the central bank increases the target rate of inflation in response to higher rates of inflation.
• B) the deviation of output from the natural level of output increases as result of higher rates of inflation.
• C) higher rates of inflation generate positive supply shocks.
• D) expectations of inflation increase as a result of higher inflation in previous periods.

---

Definitions:

Layout Design

The process of arranging physical resources in a space, such as machinery or equipment in a factory, to optimize workflow and efficiency.

Inventory Requirements

The specific amount and type of stock or materials a business needs to maintain to fulfill customer orders efficiently.

Personnel Levels

The number of staff members employed in a business or organization, which can be adjusted based on workload and operational requirements.

Inventory Decisions

The process of determining the optimal level and timing of inventory to minimize costs and meet demand.