Question

Use AD/AS model to explain how Canadian economy saw 4% Real GDP with very little inflation. Select one: a. Canada's Aggregate demand curve shifted rightward during this time period due to large increases in consumption spending and business investment. b. Canada's Aggregate supply curve shifted rightward due to increases in computer technology and productivity gains. c. Canada's Aggregate demand curve shifted leftward during this period, causing the price level to fall. d. Both choice 1 and choice 2 occurred, causing Real GDP to increase, but keeping the price level relatively constant.

Answer 1

The Correct Answer is "D"

Step-by-step explanation:

When aggregate demand moves to the right; there is an enhancement in the general cost level just as the genuine GDP. When there is a rightward move of the aggregate supply, genuine GDP increments yet broad value level reductions. It might happen that the size of the two movements is same with the goal that cost level stays unaltered pretty much however genuine GDP increments.