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Everything else remaining the​ same, an increase in aggregate demand increases​ ______.

A.short-run aggregate supply
B.long-run aggregate supply
C.potential GDP
D.the quantity of real GDP supplied

User Sean Wang
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Final answer:

An increase in aggregate demand leads to a higher (Option d) quantity of real GDP supplied, marked by a shift in the aggregate demand curve to the right, resulting in higher output and an inflationary pressure for a rise in price levels.

Step-by-step explanation:

Everything else remaining the same, an increase in aggregate demand increases the quantity of real GDP supplied. When aggregate demand increases, for instance, due to a surge in export sales, higher government spending, or tax cuts, it causes the aggregate demand curve to shift to the right. This shift leads to a new equilibrium with higher output, lower unemployment, and an inflationary pressure for price levels to rise. Such an increase in aggregate demand does not immediately affect the short-run aggregate supply, long-run aggregate supply, or the potential GDP. However, it does influence the quantity of real GDP that suppliers are willing to produce at the prevailing price levels.

User Pstryk
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