GDP in excess of potential GDP will shift the aggregate supply curve to the left and the price level will increase.

Name: GDP in excess of potential GDP will shift the aggregate supply curve to the left and the price level will increase.
Brand: Quizplus
Rating: 4.9 (37 reviews)

Question

Quizplus · Accepted Answer

When GDP exceeds potential GDP, it indicates an overheated economy, leading to increased demand for resources, higher production costs, and upward pressure on prices, causing the aggregate supply curve to shift left.

GDP in Excess of Potential GDP Will Shift the Aggregate