Suppose Aggregate Demand Increases by Less Than Expected

question 126

Multiple Choice

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

• A) Real GDP will be less than potential GDP.
• B) The price level will fall.
• C) Real GDP will be more than potential GDP.
• D) Both answers A and B are correct.

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Definitions:

Hallucination

A perception in the absence of external stimulus that has qualities of real perception, such as seeing, hearing, or feeling something that isn't there.

Auditory

Related to the sense of hearing or the perception of sound.

Common Mode

A term used in electrical engineering to refer to a situation where two or more parts of a system experience the same fluctuations or interference.

Negative Symptoms

Symptoms of certain mental health disorders, such as schizophrenia, that indicate a lack of functions or experiences, including diminished emotions or motivation.