Question

Which of the following is a major difference between the​ AD-AS model and the dynamic​ AD-AS model? The dynamic​ AD-AS model assumes
A. AD only includes​ consumption, investment, and government​ purchases, while the​ AD-AS model assumes AD includes​ consumption, investment, government purchases and net exports.
B. the SRAS is stable and will not​ shift, while the​ AD-AS model assumes the SRAS can only change with an exogenous event such as oil price changes.
C. the economy does not experience​ long-run growth, while the​ AD-AS model assumes there is constant inflation in the economy.
D. potential GDP increases​ continually, while the​ AD-AS model assumes the LRAS does not change.

Answer 1

Answer:

D

• Potential GDP increases​ continually, while the​ AD-AS model assumes the LRAS does not change.