Other Things Equal, an Increase in Aggregate Supply Will Cause

question 6

Multiple Choice

Other things equal, an increase in aggregate supply will cause:

• A)a decrease in equilibrium real GDP and a decrease in the equilibrium price level.
• B)an economic contraction.
• C)an increase in equilibrium real GDP and an increase in the equilibrium price level.
• D)cost-push inflation.
• E)a reduction in unemployment and a decline in inflation.

---

Definitions:

Iron

A strong, hard magnetic silvery-grey metal, very abundant in the earth's crust and the core element of hemoglobin in blood.

Pyrolysis

A thermochemical decomposition of organic material at elevated temperatures in the absence of oxygen.

Combustion

A chemical process involving the rapid combination of a substance with oxygen to produce heat and light, often resulting in fire or explosion.

Heat

A form of energy transfer between two substances or systems due to a temperature difference.