Suppose That the Economy Is at Full Employment and Aggregate

question 274

Multiple Choice

Suppose that the economy is at full employment and aggregate demand increases by more than it is anticipated to increase. Other things remaining the same,

• A) long-run aggregate supply decreases.
• B) real GDP remains at potential GDP.
• C) real GDP increases above potential GDP.
• D) real GDP decreases below potential GDP.

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Definitions:

Government Units

Administrative divisions within a government structure tasked with specific functions or responsibilities, such as departments, agencies, or commissions.

Constituents

Individuals or groups with a vested interest in the outcomes of an organization's decisions, policies, and activities.

Cocoa-Bean Processor

A facility or machine that grinds cocoa beans into cocoa powder, essential in chocolate production.

Industrial Market

A market segment consisting of businesses that purchase goods and services for use in production, manufacturing, or operations.