If the economy is currently in equilibrium at a level of GDP that is below potential GDP, which of the following would move the economy back to potential GDP?
A)an increase in wealth
B)an increase in interest rates
C)a decrease in business confidence
D)an increase in the value of the dollar relative to other currencies
E)a decrease in government spending

Question

Quizplus · Accepted Answer

An increase in wealth typically leads to higher consumer spending, which can stimulate economic activity and move the economy towards its potential GDP.

If the Economy Is Currently in Equilibrium at a Level