Exhibit 10.3

-Refer to Exhibit 10.3, which shows an aggregate demand-aggregate supply model. Which of these situations will be experienced by the economy as it moves from point e to point e'?
A) an expansionary gap
B) a decline in potential GDP
C) overutilization of resources
D) deflation
E) cost-push inflation

Question

Exhibit 10.3
 
-Refer to Exhibit 10.3, which shows an aggregate demand-aggregate supply model. Which of these situations will be experienced by the economy as it moves from point e to point e'?
A) an expansionary gap 
B) a decline in potential GDP 
C) overutilization of resources 
D) deflation 
E) cost-push inflation

Quizplus · Accepted Answer

The Answer of Exhibit 10.3
 
-Refer to Exhibit 10.3, which shows an aggregate demand-aggregate supply model. Which of these situations will be experienced by the economy as it moves from point e to point e'?
A) an expansionary gap 
B) a decline in potential GDP 
C) overutilization of resources 
D) deflation 
E) cost-push inflation

Exhibit 10.3 -Refer to Exhibit 10.3, Which Shows an Aggregate Demand-Aggregate Supply