Asked by M'Kayla McGee on May 26, 2024
Verified
For a given aggregate supply curve,an increase in aggregate demand will:
A) decrease the real interest rate.
B) increase real GDP.
C) decrease the price level.
D) increase the real exchange rate.
E) decrease real GDP.
Aggregate Supply Curve
A graphical representation showing the relationship between the total supply of goods and services at various price levels in an economy.
Aggregate Demand
The total demand for all goods and services in an economy at a given overall price level and in a given period.
- Master the concept of the interplay between aggregate demand and aggregate supply and its role in determining the economy's equilibrium.
- Acquire knowledge about the balance in macroeconomics and its repercussions on real GDP and the overall price level.
Verified Answer
SB
Siddiq BalochMay 31, 2024
Final Answer :
B
Explanation :
An increase in aggregate demand will shift the AD curve to the right, leading to an increase in both real GDP and the price level. This is because higher demand will lead to higher output and prices. The other choices are not necessarily affected by changes in aggregate demand.
Learning Objectives
- Master the concept of the interplay between aggregate demand and aggregate supply and its role in determining the economy's equilibrium.
- Acquire knowledge about the balance in macroeconomics and its repercussions on real GDP and the overall price level.
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