Exhibit 14-6 Aggregate Supply Curve

question 102

Multiple Choice

Exhibit 14-6 Aggregate supply curve

In Exhibit 14-6, when the economy moves from a GDP of $1,000 billion to a GDP of $1,100 billion,

• A) higher wages will lower the cost of producing goods.
• B) real GDP and employment both increase, but only under conditions of constant prices.
• C) real GDP increases and employment decreases, but only under conditions of price level increases.
• D) real GDP and employment both increase, but only under conditions of price level increases.

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Definitions:

Banks Closed

"Banks Closed" refers to situations when banking institutions are not operating, which could be due to holidays, strikes, financial crises, or regulatory actions.

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The duration taken to move from one location to another.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by high unemployment and financial instability.

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Railroads that extend across a continent, linking coasts and facilitating trade and travel.