Suppose aggregate demand increases by less than expected. Which of the following describes what will occur?
A) Real GDP will be less than potential GDP.
B) The price level will fall.
C) Real GDP will be more than potential GDP.
D) Both answers A and B are correct.
Correct Answer:
Verified
Q235: If people CORRECTLY anticipate an increase in
Q236: The anticipated inflation rate is 5 percent.
Q237: Suppose aggregate demand increases by more than
Q238: As far as cost-push inflation goes, the
Q239: If the economy is initially at potential
Q241: The price level falls if
A) aggregate demand
Q242: A rational expectation is
A) a forecast devoid
Q243: During a deflation, the price level is
A)
Q244: Suppose the velocity of circulation increases by
Q245: A rise in the price level because
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