Multiple Choice
If a decrease in the Z factors resulted in a very large change in the price level and a very small change in aggregate output,
A) then in the U.S. economy investment demand must not be sensitive to the interest rate.
B) then the U.S. economy must have been on the very steep part of its short-run aggregate supply curve.
C) then the U.S. economy must have been on the very flat part of its short-run aggregate supply curve.
D) then the U.S. aggregate demand curve must be very steep.
Correct Answer:

Verified
Correct Answer:
Verified
Q91: If the aggregate supply curve is vertical
Q92: An increase in inflationary expectations that causes
Q93: The economy is in a binding situation
Q94: Refer to the information provided in Figure
Q95: The Fed will raise the interest rate
Q97: In a binding situation, equilibrium is where
Q98: If the economy is on the flat
Q99: If the economy is operating at capacity,
Q100: Related to the Economics in Practice on
Q101: An increase in aggregate supply causes stagflation.