Consider an Economy in Equilibrium, and Assume No Change in Aggregate

question 35

Multiple Choice

Consider an economy in equilibrium, and assume no change in aggregate demand.An earthquake that destroys many factories across the country would result in a(n) :

• A)increase in the average price level and a decrease in real GDP.
• B)increase in the average price level and no change in real GDP.
• C)increase in the average price level and an increase in real GDP.
• D)decrease in the average price level and an increase in real GDP.
• E)decrease in the average price level and a decrease in real GDP.

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