An increase in aggregate supply will cause the price level to:
a. rise and GDP to rise
b. rise and GDP to fall.
c. rise and the unemployment rate to fall.
d. fall and GDP to rise.
e. fall and the unemployment rate to rise.
d
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How many quarters (3-month periods) must the "real" GDP decline to have the economy considered to be in a recession?
A) 1 B) 2 C) 3 D) 4
Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing causes the real risk-free interest rate to fall and equilibrium quantity of real loanable funds to fall. b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and increases the equilibrium quantity of real loanable funds. c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index. d. An increase in the value of a nation's currency encourages domestic exports and discourages imports. e. All of the above are supported by the Three-Sector Model.