In reality,AD rarely ________;however,the economy performs as though it does when it ________.
A)decreases;fluctuates with potential GDP
B)increases;decreases at a pace much slower than potential GDP
C)stagnates;increases at a pace much faster than potential GDP
D)decreases;increases at a pace much slower than potential GDP
E)decreases;increases at a pace much faster than potential GDP

Question

Quizplus · Accepted Answer

AD rarely decreases, but the economy may perform as though it does. This is because the pace of increase in the economy may be slower than potential GDP, leading to a decrease in economic growth relative to its potential. This is consistent with choice D, where AD decreases and the economy increases at a pace much slower than potential GDP.

In Reality,AD Rarely ________;However,the Economy Performs as Though It Does