Other Things Equal, an Increase in Aggregate Demand Will Result

question 110

Multiple Choice

Other things equal, an increase in aggregate demand will result in:

• A) an economic expansion.
• B) higher unemployment and a lower equilibrium price level.
• C) an economic recession.
• D) a decrease in equilibrium real GDP and an increase in the equilibrium price level.
• E) a decrease in the overall economic welfare.

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Definitions:

Substitutes

Products or services that can be used in place of one another, where an increase in the price of one leads to an increase in demand for the other.

Good A

A term which might refer to a specific product or item in a hypothetical economic scenario or model, but without more context is not a standard economic term.

Good B

An unspecified product referred to for the sake of example; characteristics or qualities would depend on the context.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price over a specified period of time.