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Asked by Timothy DeKorver on May 13, 2024

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Given a downward-sloping aggregate demand curve,if short-run aggregate supply increases,real GDP must increase and nominal GDP must fall.

Nominal GDP

The aggregate value of all end products and services created inside a country during a specific time, calculated in present-day prices.

Aggregate Demand Curve

A graphical representation that shows the inverse relationship between the overall price level and the total output demanded in the economy.

Real GDP

measures the value of all final goods and services produced within a country in a given period, adjusted for inflation.

  • Assess the impact of fiscal and monetary policies on aggregate supply and aggregate demand.
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EG
Elaine GonzalezMay 18, 2024
Final Answer :
False
Explanation :
If short-run aggregate supply increases, real GDP will increase and the price level will decrease. However, nominal GDP (which is equal to the product of real GDP and the price level) may either increase, decrease, or remain constant depending on the magnitude of the change in real GDP and the price level.

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