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Question 41
Which of the following will most likely accompany an unanticipated increase in aggregate demand?
(1) a decrease in real GDP
(2) a decrease in prices
(3) an increase in real GDP
(4) a decrease in resource prices

Ask by Bob Malone. in Cayman Islands
Mar 31,2025

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An unanticipated increase in aggregate demand is most likely to lead to an increase in real GDP.

Solución

  1. An unanticipated increase in aggregate demand shifts the aggregate demand curve to the right.
  2. In the short run, this shift typically leads to higher output and a higher price level.
  3. Therefore, an increase in aggregate demand is most likely accompanied by an increase in real GDP, i.e., .

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Bonus Knowledge

When aggregate demand unexpectedly increases, the economy typically reacts by producing more goods and services, leading to an increase in real GDP. This is because businesses ramp up production to meet the growing demand, resulting in higher output and potentially more employment opportunities.
Additionally, this surge in demand can initially lead to price increases, especially if the supply does not meet the newfound demand right away. If not managed, this scenario can create inflationary pressures as consumers are willing to pay more for the limited goods available.

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