Real GDP definitely increases if
A)potential GDP decreases so that real GDP exceeds potential GDP.
B)the AS curve shifts leftward and the AD curve does not shift.
C)both the AD curve and the AS curve shift rightward.
D)the AD curve shifts leftward and the AS curve shifts rightward.
E)both the AD curve and AS curve shift leftward.

Question

Quizplus · Accepted Answer

When both the Aggregate Demand (AD) curve and the Aggregate Supply (AS) curve shift rightward, it indicates an increase in the overall output and production capacity of the economy, leading to an increase in real GDP.

Real GDP Definitely Increases If