According to the AD-AS model,demand shocks affect real GDP growth while real shocks do not affect real GDP growth.

Question

Quizplus · Accepted Answer

Both demand shocks and real shocks can affect real GDP growth in the AD-AS model. Demand shocks, such as changes in consumer or government spending, affect aggregate demand and can lead to changes in real GDP. Real shocks, such as changes in technology or natural disasters, affect aggregate supply and can also lead to changes in real GDP. Therefore, both types of shocks can impact real GDP growth in the AD-AS model.

According to the AD-AS Model,demand Shocks Affect Real GDP Growth