Asked by Isiwat Taiwo on Jun 29, 2024
Verified
Which of the following is most likely to happen if the aggregate demand curve for an economy (which was initially in equilibrium) shifts to the left?
A) The equilibrium real GDP will decrease.
B) The equilibrium price level in the economy will increase.
C) The aggregate supply curve will shift rightward.
D) The aggregate supply curve will shift leftward.
E) The economy will experience an expansion.
Aggregate Demand Curve
A graph showing the relationship between the total demand for goods and services and the overall price level in the economy, all else being equal.
Real GDP
Gross Domestic Product adjusted for inflation, providing a more accurate reflection of an economy’s size and growth rate.
Aggregate Supply Curve
A graphical representation showing the relationship between the overall price level in an economy and the total output produced by that economy at various price levels.
- Familiarize yourself with the connection between aggregate demand and aggregate supply and its repercussion on economic stability.
- Understand the macroeconomic equilibrium and its implications for real GDP and price level.
Verified Answer
Learning Objectives
- Familiarize yourself with the connection between aggregate demand and aggregate supply and its repercussion on economic stability.
- Understand the macroeconomic equilibrium and its implications for real GDP and price level.
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