Which of the Following Is Not an Assumption Made by the Dynamic

question 14

Multiple Choice

Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply?

• A)Potential GDP increases continuously.
• B)Aggregate demand shifts to the right during most periods.
• C)Aggregate supply shifts to the right except during periods when workers and firms expect higher wages.
• D)Aggregate demand and potential GDP decrease continuously.

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Definitions:

Market Supply

The total amount of a specific good or service available for purchase at any given price, from all producers combined.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting the good's sensitivity to price changes.

Market Supply

Refers to the total amount of a product that producers are willing and able to sell at a given price over a certain period of time.

Agricultural Producers

Entities or individuals engaged in the cultivation of plants and rearing of animals for food, fiber, and other products used to sustain and enhance human life.