Potential GDP increased from 4.7 trillion to 16.6 trillion ...

[khang]

Potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in economic growth. Also, during this time ________ occurred because ________.
 
  A) inflation; aggregate demand decreased by more than potential GDP
  B) stagflation; aggregate demand increased by more than potential GDP
  C) deflation; aggregate demand increased by more than potential GDP
  D) inflation; aggregate demand increased by more than potential GDP
  E) inflation; aggregate demand increased by less than potential GDP

Question 2

How are the domestic sellers and buyers of a good affected if a country starts exporting the good?
 
  What will be an ideal response?

[Pariscourtney]

Answer to Question 1

D

Answer to Question 2

If the country starts exporting the good, sellers can sell the good at a higher price than the domestic price. Therefore, sellers gain. On the other hand, buyers have to pay a higher price for the good; therefore, they lose.

[khang]

Thanks for the timely response, appreciate it

[parshano]

YES! Correct, THANKS for helping me on my review