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Ultimate Flashcard Review
Video
Changes in Equilibrium in the AD-AS Model
Key Concepts to Understand
Question 1 of 4
A significant increase in household wealth due to a booming stock market would lead to what short-run change in the economy?
A decrease in the price level and a decrease in real GDP.
An increase in the price level and a decrease in real GDP.
A decrease in the price level and an increase in real GDP.
An increase in the price level and an increase in real GDP.
Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
Assume an economy is initially in long-run equilibrium. The government then significantly increases its spending on infrastructure projects without changing taxes. In the short run, what is the most likely impact on the price level and real GDP?
Price level decreases, Real GDP decreases
Price level increases, Real GDP decreases
Price level decreases, Real GDP increases
Price level increases, Real GDP increases
No change in price level, Real GDP increases
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.