If real GDP is greater than potential GDP, then to restore ...

[TFauchery]

If real GDP is greater than potential GDP, then to restore equilibrium, ________ and the price level ________.
 
  A) the aggregate supply curve shifts rightward; falls
  B) the aggregate demand curve shifts leftward; rises
  C) the aggregate supply curve shifts leftward; rises
  D) the aggregate demand curve shifts rightward; falls
  E) potential GDP increases; falls

Question 2

A country reports that when real GDP is 13.0 trillion, aggregate planned expenditure is 14.0 trillion. When real GDP equals 13.0 trillion,
 
  A) planned inventory changes by 1.0 trillion.
  B) planned inventory changes by -1.0 trillion.
  C) both planned and unplanned inventory changes are -1.0 trillion.
  D) unplanned inventory changes by -1.0 trillion.
  E) unplanned inventory changes by 1.0 trillion.

[yeungji]

Answer to Question 1

C

Answer to Question 2

D