An Initial Increase in Aggregate Demand That Is NOT Followed

question 53

Multiple Choice

An initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in a long- run equilibrium with

• A)a higher price level and an increased level of real GDP.
• B)a higher price level but the same real GDP.
• C)the same price level and a lower level of real GDP.
• D)None of the above answers is correct.

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Definitions:

Purchasing Power

The worth of a currency reflected by the quantity of goods or services a single unit of that currency can purchase.

Net Assets

The total assets of a company minus its total liabilities.

Deferral Method

An accounting practice that involves postponing the recognition of certain income or expenses until a later accounting period, typically to match revenue with expenses more effectively.

Donation Revenue

Income received from gifts or donations, often characterized by the absence of an expected return or direct benefit to the donor.