An Increase in Real GDP Leads to

question 237

Multiple Choice

An increase in real GDP leads to

• A) an increase in aggregate planned expenditure.
• B) a decrease aggregate planned expenditure.
• C) a change in aggregate planned expenditure but whether the change is an increase or a decrease depends on whether nominal GDP increases or decreases.
• D) no change in aggregate planned expenditure.

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Definitions:

Market Price

The current value at which a good or service can be bought or sold in a market.

Economic Profits

The discrepancy between a corporation's total earnings and all of its costs, covering both overt and hidden expenses.

Competitive Market

A market structure characterized by a large number of sellers and buyers, where no single entity can dictate prices or market conditions.

Market Price

The current price at which a good or service can be bought or sold in a given market.