A Federal Policy That Leads to an Increase in Aggregate

question 70

Multiple Choice

A federal policy that leads to an increase in aggregate supply is likely to result in:

• A)lower levels of employment.
• B)an increase in aggregate demand.
• C)a higher price level.
• D)lower levels of real GDP.
• E)an economic expansion.

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Definitions:

Marginal Benefit

The additional satisfaction or utility gained by consuming an extra unit of a good or service.

Diamond

A naturally occurring gemstone composed of carbon, known for its hardness and brilliance, often used in jewelry.

Marginal Analysis

The examination of the costs and benefits of a small (marginal) change in the production of goods or services.

Wheat Farmer

An individual or entity engaged in the cultivation of wheat crops for consumption or sale.