Which of the Following Could Explain Why There Is an Increase

question 47

Multiple Choice

Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls?

• A)SRAS shifted to the right by more than LRAS.
• B)AD shifted to the right by more than SRAS.
• C)AD shifted to the right by less than SRAS.
• D)AD did not shift and SRAS shifted to the left.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Total Revenue

The entire amount of income generated by the sale of goods or services before any expenses are subtracted.

French-door Refrigerators

A style of refrigerator with two doors that open outward from the middle for the refrigerator section on top and a freezer drawer on the bottom.

Robinson-Patman Act

A United States federal law aimed at preventing unfair competition and price discrimination by regulating trade practices.