What Happens If Aggregate Demand Increases Simultaneously with a Decrease

question 50

Multiple Choice

What happens if aggregate demand increases simultaneously with a decrease in short-run aggregate supply,due to anticipated expansionary monetary policy?

• A) The price level remains constant,and real gross domestic product (GDP)decreases.
• B) The price level increases,and real gross domestic product (GDP)increases.
• C) The price level increases,and real gross domestic product (GDP)decreases.
• D) The price level decreases,and real gross domestic product (GDP)remains constant.
• E) The price level increases,and real gross domestic product (GDP)remains constant.

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Definitions:

Clutch Friction Facings

The material on the surface of a clutch disc that contacts with the flywheel and pressure plate, enabling friction that facilitates torque transmission.

Pull-Type Clutch

Any clutch that pulls the release bearing toward the transmission to release it.

Clutch Pedal Free Travel

The distance that a clutch pedal can be depressed before the clutch disengagement mechanism starts to operate.

Internal Adjusting Ring

A component inside a mechanism, such as a bearing or a brake, that can be tightened or loosened to adjust the function or fit of the mechanism.