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question 71

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Use the following to answer questions .
Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1 Use the following to answer questions . Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1   -(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1)  Suppose the economy is initially at A. Now suppose an increase in government purchases shifts the aggregate demand curve to AD<sub>2</sub>. Which of the following is false about the economy after it adjusts to its new long-run equilibrium? A)  Nominal wages increase. B)  The price level rises to P<sub>d</sub>. C)  Firms employ more workers than in the short-run equilibrium. D)  There is some frictional and structural unemployment.
-(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1) Suppose the economy is initially at A. Now suppose an increase in government purchases shifts the aggregate demand curve to AD2. Which of the following is false about the economy after it adjusts to its new long-run equilibrium?

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Definitions:

Basic Psychology

The study of fundamental principles, theories, and research methods in psychology.

Practical Application

The use of theoretical knowledge in a real-world context, demonstrating how concepts or techniques can be effectively employed.

Basic Psychology

The study of fundamental principles, theories, and research methods in psychology, focusing on understanding human behavior and mental processes.

Practical Significance

The importance or usefulness of research findings in real-world applications, beyond statistical significance.

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