An Increase in Aggregate Demand When the Economy Is Operating

question 226

Multiple Choice

An increase in aggregate demand when the economy is operating at high levels of output is likely to result in

• A) a large increase in both output and the overall price level.
• B) an increase in the overall price level but little or no increase in output.
• C) an increase in output but little or no increase in the overall price level.
• D) little or no increase in either output or the overall price level.

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Definitions:

Obligation

A duty or commitment to do something, such as repay a loan or fulfill a contract.

Financial Functions

Mathematical formulas used in finance to analyze and calculate financial figures such as interest rates, returns, payments, and the value of investments.

Compounded Quarterly

Interest on an investment is calculated and added to the principal sum every three months.

Total Amount

The complete sum or quantity of money or measure when everything is added together.