In case of the classical model, increase in aggregate expenditure would:
a. shift the aggregate demand curve upward leading to an increase in real GDP and prices.
b. shift the aggregate demand curve downward leading to an increase in real GDP and prices.
c. shift the aggregate demand curve upward leading to a decrease in real GDP and prices.
d. shift the aggregate demand curve downward leading to a decrease in real GDP and prices.
e. shift the aggregate demand curve upward leading to an increase in prices and no change in real GDP.
e
You might also like to view...
Suppose the real interest rate rises and the quantity of loanable funds decreases. These changes could have been the result of
A) firms expecting higher future profits. B) an increase in disposable income. C) an increase in household wealth. D) a decrease in the default risk.
Which theory of economic growth concludes that growth can continue indefinitely?
A) the classical theory B) the neoclassical theory C) the new theory D) all of the theories
Suppose a market has the demand function Qd=20-0.5P. Using the midpoint method, what is the price elasticity of demand between $30 and $40?
A positive statement is
A. a value judgement. B. based upon what can be demonstrated to be true. D. can be shown to be correct or incorrect.