If aggregate demand increases in the intermediate range of the aggregate supply curve then the:
A. price level rises and real GDP falls.
B. price level rises and real GDP rises.
C. price level falls and real GDP falls.
D. price level falls and real GDP rises.
Answer: B
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Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?
A) Real GDP increases more than nominal GDP increases. B) Nominal GDP and real GDP increase by the same amount. C) Nominal GDP increases more than real GDP increases. D) Nominal GDP and real GDP decrease by the same amount.
Because the poor tend to use public transportation more than the rich do, a tax on the Washington, D.C., metro probably would be:
A. retroactive. B. reactionary. C. progressive. D. regressive.
The long-run Phillips curve corresponds to the natural rate of unemployment.
Answer the following statement true (T) or false (F)
Refer to the given figure. If the relevant saving schedule were constructed:
A. saving would be minus $20 billion at the zero level of income.
B. aggregate saving would be $60 at the $60 billion level of income.
C. its slope would be 1/2.
D. it would slope downward and to the right.