An Increase in Real GDP Leads to

question 46

Multiple Choice

An increase in real GDP leads to

• A)an increase in aggregate planned expenditure.
• B)a decrease in aggregate planned expenditure.
• C)no change in aggregate planned expenditure.
• D)a change in aggregate planned expenditure but whether the change is an increase or a decrease depends on whether nominal GDP increases or decreases.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Production Possibility Frontier

A graphical representation that shows the maximum quantity of two goods or services that a society can produce given fixed resources and technology, assuming all resources are fully employed.

Technological Improvement

Advancements or enhancements in technology that increase efficiency, productivity, or bring new capabilities to businesses, industries, or consumer products.

Wheat

A cereal grain that is a staple food in many parts of the world, used to make flour for bread, pasta, pastry, and other foods.