Aggregate Demand in India Increased in 2008

question 204

Multiple Choice

Aggregate demand in India increased in 2008. In addition, real GDP grew strongly and inflation approached 10 percent. The best explanation for this inflation is that

• A) aggregate supply did not change.
• B) potential GDP increased, but at a slower rate than aggregate demand.
• C) there was a movement up along the aggregate demand curve in 2008.
• D) potential GDP decreased.

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Definitions:

Good Faith Purchaser

A person who buys property without knowledge of any existing claims, liens, or encumbrances against it.

F.O.B. Hartford

specifies terms of a shipping agreement where the seller is responsible for transportation costs and risks until the goods reach Hartford, at which point the buyer assumes responsibility.

Destination Contract

A contract specifying that the seller will bear the risk and cost of delivering goods to a specific location agreed upon by the seller and the buyer.

Identification of the Goods

The process of specifying or distinguishing goods to be covered by a sales or service contract.