Refer to the above figure. Suppose the economy is at E originally, when the dollar increases in value. Which aggregate supply curve applies if the value of real GDP increases?
A) 1
B) 2
C) 4
D) 5

Question

Quizplus · Accepted Answer

When the dollar increases in value, imports become cheaper and exports more expensive, potentially increasing real GDP. Aggregate supply curve 1 represents a situation where the economy can produce more output at the same price level, indicating an increase in real GDP.

Refer to the Above Figure