An Increase in the Aggregate Demand for Goods and Services

question 62

Multiple Choice

An increase in the aggregate demand for goods and services will result in an increase in the amount of output firms are willing to produce, and this increase in output will be accompanied by:

• A) a decrease in the inflation rate.
• B) an increase in the inflation rate.
• C) a decrease in nominal GDP.
• D) an increase in potential GDP.

---

Definitions:

Investment

The allocation of resources, usually money, in order to generate income or profit.

Financial Markets

Marketplaces where buyers and sellers engage in trading of financial assets such as stocks, bonds, derivatives, and currencies.

Daily Fluctuation

This describes the variations in the price of a financial instrument, such as stocks or commodities, within a single trading day.

Mispriced Securities

Refers to stocks or bonds that are sold for a price which does not accurately reflect their intrinsic value.