If Real GDP Is Greater Than Potential GDP,then to Restore

question 260

Multiple Choice

If real GDP is greater than potential GDP,then to restore equilibrium,________ and the price level ________.

• A)the aggregate demand curve shifts leftward;rises
• B)the aggregate demand curve shifts rightward;falls
• C)the aggregate supply curve shifts leftward;rises
• D)the aggregate supply curve shifts rightward;falls
• E)potential GDP increases;falls

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Definitions:

Introspection

Reviewing and reflecting on one's own mental and emotional experiences.

Edward Titchener

A British psychologist who founded structuralism, a school of thought aimed at analyzing the adult mind in terms of the simplest definable components.

Functionalism

A theoretical perspective that views society as a complex system whose parts work together to promote stability and integration.

Empiricism

The theory that all knowledge is derived from sense-experience and observation.