Which of the Following Statements Is True

question 7

Multiple Choice

Which of the following statements is true?

• A) When aggregate supply is perfectly elastic, increases in aggregate demand will be in?ationary.
• B) Economic growth that results from an increase in aggregate supply also increases the rate
• C) Demand-side policies reduce the difference between actual and potential GDP and can only close the output gap.
• D) Real expansion of the economy involves an increase in aggregate demand.

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Definitions:

Financial Performance

Financial performance refers to the assessment of a company's revenue, expenses, and earnings to understand its economic health and efficiency.

Foreign Exchange Rate

The price of one currency in terms of another currency, determining how much of one currency can be exchanged for another.

Business Transactions

Financial activities or operations that involve an exchange of goods, services, or funds between two or more parties.

Equity Securities

Equity securities represent an ownership interest held in a company by individuals or firms in the form of stocks.