Suppose Aggregate Demand Increases by Less Than Expected

question 86

Multiple Choice

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

• A) The price level will fall.
• B) Real GDP will be more than potential GDP.
• C) Real GDP will be less than potential GDP.
• D) Both answers A and B are correct.

---

Definitions:

Self-Interest

Self-Interest describes actions or decisions motivated by personal gain, often without regard for others.

Moral Result

The outcome or impact of an action or decision judged according to ethical principles and moral values.

Utilitarianism

An ethical theory that promotes actions that maximize happiness and well-being for the majority of a population.

Laissez Faire

An economic philosophy advocating minimal governmental intervention in the market and the private sector.