An Increase in Aggregate Demand Will Have the Following Effect

question 43

Multiple Choice

An increase in aggregate demand will have the following effect on potential output:

• A) potential output will increase.
• B) potential output will decrease.
• C) potential output will increase at first and then decrease.
• D) there won't be a change in potential output from an increase in aggregate demand.

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Definitions:

60-Day Note

A financial instrument or a loan agreement that requires repayment of the principal amount along with any accrued interest within 60 days.

Note Receivable

A written promise that entitles the holder to receive a specified amount of money at a set date in the future, often bearing interest.

90-Day Note

A short-term debt obligation that matures in 90 days.

Settle Account

The process of paying off or resolving a financial account or obligation.