Exhibit 14-6 Aggregate Supply Curve

Multiple Choice

Exhibit 14-6 Aggregate supply curve

In Exhibit 14-6, when the economy moves from a GDP of $1,000 billion to a GDP of $1,100 billion,

A) higher wages will lower the cost of producing goods.
B) real GDP and employment both increase, but only under conditions of constant prices.
C) real GDP increases and employment decreases, but only under conditions of price level increases.
D) real GDP and employment both increase, but only under conditions of price level increases.