An Increase in the Aggregate Demand for Goods and Services

question 91

Multiple Choice

An increase in the aggregate demand for goods and services will result in an increase in the amount of output firms are willing to produce, and this increase in output is accompanied by:

• A)a decrease in the inflation rate.
• B)an increase in the inflation rate.
• C)a decrease in nominal GDP
• D)an increase in potential GDP.

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Definitions:

Depressed Economy

A state of the economy characterized by high unemployment, low spending, and overall financial hardship.

Anglo-American Merchants

Businesspeople from England or the United States engaged in international trade during the 17th to 19th centuries, often playing significant roles in colonial economies.

French West Indies

A region in the Caribbean Sea that consists of French overseas territories, known for their distinct Franco-Caribbean culture and history.

Illegal Trade

The exchange of goods or services that is forbidden by law, regulations, or treaty.