In the Short Run, Changes in Real GDP Are Primarily

question 52

Multiple Choice

In the short run, changes in real GDP are primarily determined by changes in factor- utilization rates which, in turn, are due to changes in

• A)aggregate demand only.
• B)aggregate supply only.
• C)aggregate supply because when firms increase prices they are then willing to produce more.
• D)aggregate demand because increases in demand will lead to increases in output.
• E)both aggregate demand and aggregate supply.

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Definitions:

Fixed Price

A set price for a product or service that does not change under normal conditions.

Derivative Security

A financial instrument whose value is based on an underlying asset, index, or other financial instruments.

Call Option

An economic agreement allowing the buyer the choice, yet not mandating, to purchase an asset at an agreed-upon price within a designated duration.