-The Figure Above Illustrates the Aggregate Demand, Short-Run Aggregate Supply

question 100

Multiple Choice

-The figure above illustrates the aggregate demand, short-run aggregate supply, and long-run aggregate supply in Lotus Land. The economy is currently at point D and the government increases its expenditure on goods and services. The economy will move to ________. The price level will ________, and the change in real GDP will be ________ the increase in aggregate demand.

• A)point D; rise; less than
• B)point A; fall; less than
• C)point C; rise; less than
• D)point B; remain constant; the same as

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Definitions:

Heritage Foundation

A conservative think tank based in the United States that conducts research and advocacy on public policy issues.

Hong Kong

A Special Administrative Region of China known for its vibrant economy and status as a global financial center.

Division of Labor

The assignment of different parts of a manufacturing process or task to different people to improve efficiency.

Specialized Tasks

Distinct components of a job designed to be performed by individuals with specific skills or training, often to increase efficiency.