According to the AS-AD Model

question 36

Multiple Choice

According to the AS-AD model,

• A) the AS curve is always equal to potential GDP.
• B) the equilibrium is where the AS curve crosses the AD curve, but the amount of real GDP at this point is not always equal to potential GDP.
• C) a change in the amount of potential GDP is the only factor that shifts both the aggregate supply curve and the aggregate demand curve.
• D) the aggregate quantity demanded is typically greater than the aggregate quantity supplied, thereby leading to inflation.
• E) the aggregate quantity supplied is typically greater than the aggregate quantity demanded, thereby leading to unemployment.

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