According to the Classical Theory, an Inward Shift in Aggregate

question 245

Multiple Choice

According to the classical theory, an inward shift in aggregate demand would reduce

• A) real Gross Domestic Product (GDP) and the price level.
• B) the price level but have no effect on real Gross Domestic Product (GDP).
• C) real income but have no impact on the price Gross Domestic Product (GDP).
• D) the price level but increase real Gross Domestic Product (GDP).

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Definitions:

Airplane

A powered flying vehicle with fixed wings and a weight greater than that of the air it displaces.

Mass Production

The manufacture of large quantities of standardized products, often using assembly lines or automated technology.

Assembly Lines

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product efficiently.

Large Factories

Extensive industrial facilities where goods are manufactured or assembled, typically employing many workers and utilizing heavy machinery.