Other Things Being Constant, What Will Be the Effect of Each

question 6

Essay

Other things being constant, what will be the effect of each of the following upon the equilibrium level of GDP?
(a) An increase in the amount of liquid assets consumers are holding;
(b) A sharp rise in stock prices;
(c) A rapid upsurge in the rate of technological advance; and
(d) A sharp increase in the interest rate.

---

Definitions:

Sensory Responses

The physiological reactions of sensory organs or nerves to external stimuli.

Blood Sugar

The concentration of glucose present in the blood, crucial for energy supply to cells and maintaining metabolic homeostasis.

Anti-hypertensive Medication

Drugs used to manage high blood pressure, aiming to prevent complications such as stroke and heart attack.

Diabetes Mellitus

A metabolic disorder characterized by high blood sugar levels over a prolonged period due to the body's inability to produce enough insulin or effectively use the insulin it produces.