Whether Prices or Real GDP Exhibit the Greater Response to Increased

question 169

True/False

Whether prices or real GDP exhibit the greater response to increased aggregate demand depends on the degree of capacity utilization in the economy.

---

Definitions:

Consumption Function

An economic equation that illustrates the connection between gross national income and total consumption levels.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how much households intend to consume at various income levels.

Aggregate Income

The total income earned by all individuals and organizations in an economy over a specific period of time.

Aggregate Income

The total income earned by all individuals and entities within an economy during a given time period.