In the Intermediate Range of the Aggregate Supply Curve, Higher

question 91

Multiple Choice

In the intermediate range of the aggregate supply curve, higher aggregate demand will increase:

• A) both the price level and real GDP.
• B) real GDP without raising the price level.
• C) the price level without affecting real GDP.
• D) the price level but reduce real GDP.

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Definitions:

Marginal Utility

The supplementary value or utility derived from the consumption of one more unit of a good or service.

Market Price

The existing value at which an asset or service could be sold or bought.

Consumption

The usage of goods and services by households.

Labor Supply Decisions

The determination by individuals regarding how much they are willing to work, influenced by wages, working conditions, and personal preferences.