Exhibit 25-1 -Suppose the Economy Is Initially at Point a in Exhibit

question 25

Multiple Choice

Exhibit 25-1
-Suppose the economy is initially at point A in Exhibit 25-1. If government purchases increase, which point best depicts where the economy will be in the short run as a result of the change in spending?

• A)F
• B)D
• C)B
• D)E

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Definitions:

Monthly Revenues

The total income generated by a business or entity from its activities within a month.

Bar Graph

Also known as a bar chart, a graphic presentation of statistical information resembling the histogram except that there may not be a numeric scale on the horizontal axis and the bars normally do not touch each other.

Line Graph

A type of graph often used for illustrating data over time.

Histogram

A graphical representation of the distribution of numerical data, using bars of different heights to show frequencies of data within successive intervals.