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An Aggregate Demand (AD)shock Will Have a Small Effect on Real

Question 66

Multiple Choice

An aggregate demand (AD) shock will have a small effect on real GDP and a large effect on the price level when


A) the AS curve is steep.
B) the AD curve intersects the AS curve on the downward-sloping portion of the AS curve.
C) the AS curve is close to horizontal.
D) the AD curve is steep.
E) the AD curve is flat.

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