Multiple Choice
The following are aggregate demand and supply schedules for a hypothetical economy.All figures are in $ billions.
Note: Potential GDP is 3,000.
-Refer to the information above to answer this question.Assume that technological change increases aggregate supply by 340.What would be the result?
A) A new full employment level of Real GDP of 3,340 and lower prices.
B) An inflationary gap of 340.
C) A recessionary gap of 240.
D) A new equilibrium of Real GDP of some indeterminate level depending on how much prices fell.
E) A new full-employment level of Real GDP of 3,340 with no change in prices.
Correct Answer:
Verified
Correct Answer:
Verified
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