-Refer to the above figure.If the aggregate demand curve shifts beyond AD5,which of the following would we NOT expect?
A)Strong demand-pull inflation
B)No increase in real Gross Domestic Product (GD
C)Strong and rapid increases in the price level
D)Increases in real net domestic product

Question

-Refer to the above figure.If the aggregate demand curve shifts beyond AD5,which of the following would we NOT expect?
A)Strong demand-pull inflation 
B)No increase in real Gross Domestic Product (GD
C)Strong and rapid increases in the price level 
D)Increases in real net domestic product

Quizplus · Accepted Answer

When the aggregate demand curve shifts beyond AD5, the economy is likely operating beyond its full capacity, leading to demand-pull inflation. This situation typically results in strong inflationary pressures without an increase in real GDP, as the economy cannot produce beyond its potential output. Therefore, we would not expect increases in real net domestic product.

-Refer to the Above Figure