When the Quantity of Real GDP Demanded Exceeds the Quantity

question 234

Multiple Choice

When the quantity of real GDP demanded exceeds the quantity of real GDP supplied,firms

• A)increase production and prices.
• B)decrease production and prices.
• C)increase production and lower prices.
• D)decrease production and increase prices.
• E)do not change production because aggregate demand and potential GDP will adjust.

---

Definitions:

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that excludes interest and income tax expenses.

Income Statement

A financial statement showing a company's income, expenses, and profits over a specified period, typically a quarter or year.

EBIT

Earnings Before Interest and Taxes is a measure of a firm's profitability that excludes interest and income tax expenses.

Operating Profit

Profit generated from a company's core business operations, excluding deductions of interest and taxes.