In the Basic AD/AS Macro Model,permanent Increases in Real GDP

question 130

Multiple Choice

In the basic AD/AS macro model,permanent increases in real GDP are possible only if

• A)potential output is increasing.
• B)the correct fiscal policy is implemented.
• C)the economy's automatic stabilizers are allowed to operate.
• D)the aggregate supply curve is vertical.
• E)aggregate demand responds positively to demand shocks.

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