An Increase in Aggregate Demand Causes an Increase in ________

question 70

Multiple Choice

An increase in aggregate demand causes an increase in ________ only in the short run, but causes an increase in ________ in both the short run and the long run.

• A)the price level; real GDP
• B)nominal GDP; real GDP
• C)the price level; the price level
• D)real GDP; the price level
• E)nominal GDP; the price level

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Definitions:

Break-Even Point

The level of sales or production at which total revenues equal total expenses, resulting in no profit or loss for the business.

Sales

The total amount of goods or services sold by a company within a specific period, generating revenue.

Standard Bikes

Refers to bicycles that adhere to specific industry norms and standards, typically meant for average or typical use scenarios.

Fixed Costs

Costs that do not vary with the level of output or sales over the short term, such as rent or salaries.