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If an Increase in Aggregate Demand Causes Prices to Increase

Question 23

Multiple Choice

If an increase in aggregate demand causes prices to increase slightly but output to increase significantly, then


A) the AS-curve must be very flat
B) the AD-curve must be very steep
C) the AD- and AS-curves must both be very steep
D) we must be looking at the very long-run AD-AS model
E) we must be looking at the very short-run AD-AS model

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