Multiple Choice
Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls?
A) SRAS shifted to the right by more than LRAS.
B) AD shifted to the right by more than SRAS.
C) AD shifted to the right by less than SRAS.
D) AD did not shift and SRAS shifted to the left.
E) LRAS shifted leftward and AD shifted rightward.
Correct Answer:
Verified
Correct Answer:
Verified
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