Author Question: Potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in ... (Read 130 times)

khang · **on:** Jun 29, 2018

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 · **Reply #1 on:** Jun 29, 2018

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.