Real GDP will increase:

A) only if the price level rises.

B) only if the price level falls.

C) only if the quantity of final goods and services produced rises.

D) if either the price level rises or the quantity of final goods and services produced rises.

Question

Business

Guest

16 August, 10:57

Real GDP will increase:

A) only if the price level rises.

B) only if the price level falls.

C) only if the quantity of final goods and services produced rises.

D) if either the price level rises or the quantity of final goods and services produced rises.

+2

Answers (1)

Know the Answer?

Savanna Shah · Answer 1

Answer: D) if either the price level rises or the quantity of final goods and services produced rises.

Explanation:

Economic growth is caused by an increase in aggregate demand (AD). If there is spare capacity in the economy, then an increase in AD will cause a higher level of real GDP.

Real GDP will increase:A) only if the price level rises.B) only if the price level falls.C) only if the quantity of final goods and services produced rises.D) if either the price level rises or the quantity of final goods and services produced rises.

Real GDP will increase:

A) only if the price level rises.

B) only if the price level falls.

C) only if the quantity of final goods and services produced rises.

D) if either the price level rises or the quantity of final goods and services produced rises.