A expansionary real shock shifts the aggregate

Question

Quizplus · Accepted Answer

An expansionary real shock increases production and shifts the aggregate supply curve to the right, leading to an increase in real GDP. Therefore, option D is the correct answer. Options A and E are incorrect because they both suggest a leftward shift in the supply curve, which would decrease real GDP. Option C is incorrect because it suggests a rightward shift in the demand curve, but a real shock affects the supply side of the economy, not the demand side. Option B is incorrect because it suggests a leftward shift in the demand curve, which would decrease real GDP.

A Expansionary Real Shock Shifts the Aggregate