When an Increase in Aggregate Demand Exceeds the Increase in Aggregate

question 170

Multiple Choice

When an increase in aggregate demand exceeds the increase in aggregate supply

• A) real GDP decreases while nominal GDP increases.
• B) the price level falls while real GDP increases.
• C) nominal GDP decreases and real GDP decreases.
• D) the economy will experience inflation as the price level rises.

---

Definitions:

Inhalation

The act of breathing in, whereby air (including oxygen) is drawn into the lungs, facilitating gas exchange with the bloodstream.

Exhalation

The process of breathing out, where carbon dioxide is expelled from the lungs.

Carbonic Anhydrase

An enzyme that catalyzes the conversion of carbon dioxide and water into carbonic acid, playing a critical role in the transport of carbon dioxide in the blood.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air (about 0.04% by volume) and is absorbed by plants in photosynthesis.