A change in Real GDP in the short run can be brought about by a change in
A) the exchange rate.
B) labor productivity.
C) expectations of future sales.
D) wealth.
E) all of the above

Question

Quizplus · Accepted Answer

A change in Real GDP in the short run can be brought about by a change in any of the factors listed. Changes in the exchange rate can affect exports and imports, which in turn affect aggregate demand and Real GDP. Labor productivity can affect the output of goods and services, which directly affects Real GDP. Expectations of future sales can affect investment, which can then affect aggregate demand and Real GDP. Wealth can lead to changes in consumption and investment, affecting aggregate demand and Real GDP. Therefore, all of the above can cause a change in Real GDP in the short run.

A Change in Real GDP in the Short Run Can