If Aggregate Demand Does Not Change, Aggregate Supply Policies for Economic

question 129

Multiple Choice

If aggregate demand does not change, aggregate supply policies for economic growth

• A) increase real GDP, increase potential GDP, and raise the price level.
• B) increase real GDP, increase potential GDP, and lower the price level.
• C) increase real GDP, do not change potential GDP, and decrease the price level.
• D) increase real GDP, do not change potential GDP, and do not change the price level.
• E) fail to produce economic growth.

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Definitions:

Compensation Contracts

Agreements that outline the salary, bonuses, and other forms of payment an employee receives from an employer.

Price Ceiling

A regulation that sets the maximum allowable price for a particular good or service, intended to prevent sellers from charging high prices during demand spikes.

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.