-Suppose the Aggregate Demand Curve in Figure 10

question 43

Multiple Choice

-Suppose the aggregate demand curve in Figure 10.2 increases by a total of $60 billion,from AD₂ to AD_0. Equilibrium GDP will

• A)Increase by less than $60 billion because some of the additional spending drives up prices.
• B)Increase by $60 billion.
• C)Increase by more than $60 billion because of the multiplier effect.
• D)Decrease because higher inflation causes unemployment.

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