Question

If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be

Answer 1

If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be (D) horizontal.

What is aggregate demand?

• Aggregate demand, also known as domestic final demand in macroeconomics, is the total demand for final goods and services in an economy at any given time.
• It is frequently referred to as effective demand, albeit this phrase is distinguished at times.
• This is a country's demand for its gross domestic output.
• Aggregate demand is estimated by combining consumer expenditure, government and business investment spending, and net imports and exports.
• If a change in aggregate demand has no effect on real GDP, then the short-run aggregate supply (SRAS) curve must be horizontal.

Therefore, if a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be (D) horizontal.

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Complete question:

If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be

(A) Vertical

(B) Upward sloping

(C) Downward sloping

(D) Horizontal