Which of the following will occur as a result, if aggregate demand is greater than aggregate supply at the current price level?
a. Nominal GDP will decline.
b. Employment will tend to rise.
c. Firms will tend to reduce real output.
d. Both (a.) and (c.) will occur.
e. None of the above will occur.
Aggregate Supply and Demand:
Aggregate is the term economists use to mean the total. Thus aggregate supply and aggregate demand are macroeconomic variables, and supply and demand are microeconomic variables.
Answer and Explanation: 1
Which of the following will occur as a result, if aggregate demand is greater than aggregate supply at the current price level? b. Employment will...
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fromChapter 7 / Lesson 3
Understand the aggregate demand-aggregate supply model and its features. Read more about the curve shifts of this and learn the AD-AS model through an example.