In Case of Classical Model, Increase in Aggregate Expenditure Would

question 73

Multiple Choice

In case of classical model, increase in aggregate expenditure would:

• A)shift the aggregate demand curve upward leading to increase in real GDP and prices.
• B)shift the aggregate demand curve downward leading to increase in real GDP and prices.
• C)shift the aggregate demand curve upward leading to decrease in real GDP and prices.
• D)shift the aggregate demand curve downward leading to decrease in real GDP and prices.
• E)shift the aggregate demand curve upward leading to increase in prices and no change in real GDP.

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Definitions:

AC

Alternating Current refers to an electrical current that periodically changes its direction of charge flow.

DC

Direct Current, a type of electrical current where the flow of electric charge is only in one direction.

Shading Coil

A large copper wire or band connected around part of a magnetic pole piece to oppose a change of magnetic flux.

Shaded-pole Induction Motor

A type of single-phase induction motor which operates by creating a rotating magnetic field using a shading coil.