Suppose Aggregate Demand Increases by More Than Expected

question 346

Multiple Choice

Suppose aggregate demand increases by more than expected. Which of the following describes what will occur?

• A) The price level will increase.
• B) Unemployment will fall.
• C) Real GDP will be greater than potential GDP.
• D) All of the above answers are correct.

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Definitions:

Di-sec-Butyl Ether

An ether compound formed by the dehydration reaction between two sec-butyl alcohol molecules, used as a solvent and chemical intermediate.

Butan-2-ol

An alcohol with the chemical formula C4H10O, characterized by having its hydroxyl group (-OH) on the second carbon of a four-carbon chain.

Sulfuric Acid

A highly corrosive strong mineral acid with the molecular formula H2SO4, widely used in industry.

Sulfonium Salt

A type of ionic compound that contains a positively charged sulfonium ion (a sulfur atom covalently bonded to three organic groups) and a counter anion.