Suppose Aggregate Demand Increases by More Than Expected

question 152

Multiple Choice

Suppose aggregate demand increases by more than expected. Which of the following describes what will occur?

• A) Real GDP will be greater than potential GDP.
• B) The price level will increase.
• C) Unemployment will fall.
• D) All of the above answers are correct.

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Definitions:

Sensory Neurons

Nerve cells responsible for converting external stimuli from the organism's environment into internal electrical impulses.

Somatosensory Cortex

A region of the brain responsible for processing sensory information from various parts of the body, including touch, temperature, and pain.

Temperature

A measure of the warmth or coldness of an object or substance with reference to a standard value.

Touch

The sensation caused by pressure receptors in the skin that allows humans and animals to perceive and respond to physical contact.