Refer to the Above Figure

question 233

Multiple Choice

Refer to the above figure. An increase in aggregate demand beyond real Gross Domestic Product (GDP) level Y1 would result in

• A) higher real GDP but not a higher price level.
• B) a lower price level but no change in real GDP.
• C) a higher price level but no change in real GDP.
• D) a lower price level and an increases in real GDP.

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Definitions:

Luxuries

Goods or services that are considered non-essential but desirable and are often associated with high quality and a high price.

Necessities

Essential needs required for basic human survival and well-being, such as food, water, and shelter.

Entering U.S.College Students

Entering U.S. college students refers to individuals beginning their undergraduate education in colleges or universities in the United States.

Wealthy

Having an abundance of financial resources or valuable possessions, which affords a person or entity a high standard of living.