In the Basic AD/AS Macro Model, Permanent Increases in Real

question 80

Multiple Choice

In the basic AD/AS macro model, permanent increases in real GDP are possible only if

• A)the economy's automatic stabilizers are allowed to operate.
• B)potential output is increasing.
• C)the correct fiscal policy is implemented.
• D)aggregate demand responds positively to demand shocks.
• E)the aggregate supply curve is vertical.

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