In the Classical Model, How Do Shifts in Aggregate Demand

question 178

Multiple Choice

In the classical model, how do shifts in aggregate demand affect real GDP?

• A) Real GDP will remain unchanged.
• B) Increases in aggregate demand increase real GDP.
• C) Increases in aggregate demand decrease real GDP.
• D) Decreases in aggregate demand increase real GDP.

---

Definitions:

Planned Production

The forecasted or scheduled output of goods and services based on demand predictions, resource availability, and strategic objectives.

Variance from Plan

Variance from Plan refers to the difference between what was planned or expected in terms of project performance and what was actually achieved.

Fraction Transported

The proportion of goods that are transported from one point to another within a specified period.

Modalities

Refers to the various methods, forms, or procedures available for accomplishing a task or function, often used in contexts such as transportation, therapy, and communication.