Suppose that along the aggregate demand curve, real GDP equals $14.2 trillion when the GDP deflator is 90. If the GDP deflator were 95, real GDP along the aggregate demand curve would equal
A)less than $14.2 trillion.
B)$14.2 trillion.
C)more than $14.2 trillion but less than $14.8 trillion.
D)more than $14.8 trillion.

Question

Quizplus · Accepted Answer

As the GDP deflator increases from 90 to 95, it indicates a rise in the price level, which typically leads to a decrease in the quantity of real GDP demanded along the aggregate demand curve.

Suppose That Along the Aggregate Demand Curve, Real GDP Equals