If Higher GDP Stems from an Increase in Aggregate Demand

question 85

Multiple Choice

If higher GDP stems from an increase in aggregate demand, then it is likely that:

• A) the level of inflation will also increase.
• B) aggregate supply will decrease.
• C) investments in infrastructure will reduce.
• D) unemployment rate will also increase.

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Definitions:

General Agreement

A broad contract or understanding between parties that outlines the terms and conditions of their relationship or agreement.

Imported Lumber

Refers to wood that has been sourced from another country and then brought into a domestic market for use or sale.

Tax Treatment

The specific way tax laws apply to various types of income, expenses, and investments.

Political Uncertainty

Refers to the risk or condition resulting from unclear or unpredictable political outcomes that can impact economic and financial markets.