Suppose Aggregate Demand Increases by More Than Expected

question 23

Multiple Choice

Suppose aggregate demand increases by more than expected.Which of the following does not occur?

• A)Unemployment falls.
• B)The price level rises.
• C)The natural unemployment rate does not change.
• D)Real GDP is greater than potential GDP.
• E)Stagflation occurs.

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Definitions:

Straight-Line Depreciation

A method of evenly distributing the cost of an asset over its useful life.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, indicating what a company expects to recover or sell the asset for.

Depreciation Expense

The calculated apportionment of the price of a tangible asset over the duration it is useful.