Which of the following best characterizes the effects of the flatness of the short-run aggregate supply curve?
A) the flatter the short-run aggregate supply curve, the larger the value of the spending multiplier
B) the flatter the short-run aggregate supply curve, the smaller the value of the spending multiplier
C) the flatter the short-run aggregate supply curve, the larger the impact of a shift in aggregate demand on the equilibrium price level
D) the flatter the short-run aggregate supply curve, the larger the impact of a shift in aggregate demand on the equilibrium output level
Correct Answer:
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