If Aggregate Demand and Nominal GDP Increase While the Price

question 105

Multiple Choice

If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that

• A) the economy is already at full employment.
• B) the aggregate supply curve is upward sloping.
• C) the aggregate supply curve is horizontal.
• D) the aggregate demand curve is vertical.

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Definitions:

Final Cash Flow

The last cash inflow or outflow in an investment's cash flow series, critical for calculating net present value or internal rate of return.

Development

In a general context, it refers to the process of developing or being developed, often associated with economic, social, or technological progress and improvement.

Incremental Cash Flow

The additional cash flow from a company's activities or projects, specifically distinguishing between the cash flows with and without the project.

Taxes

Compulsory financial charges or levies imposed by a government on individuals and organizations to fund public expenditures.