Multiple Choice
Which of the following is an assumption of the dynamic aggregate demand - aggregate supply model?
A) Aggregate demand and short-run aggregate supply shift to the right in most years.
B) Potential GDP is constant.
C) Actual GDP is determined by the intersection of aggregate demand and long-run aggregate supply.
D) The short-run aggregate supply shifts continuously to the left.
E) Potential GDP is a function of the price level.
Correct Answer:
Verified
Correct Answer:
Verified
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