Using the AD- AS Model, an Increase in Government Expenditure

question 13

Multiple Choice

Using the AD- AS model, an increase in government expenditure

• A) has no impact on real GDP, but will increase potential GDP.
• B) increases both real GDP and the price level.
• C) has a full multiplier effect on real GDP, leaving the price level unchanged in the long run.
• D) has no impact on real GDP.

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Definitions:

Age Differences

Variations in behavior, cognition, or physical condition that are attributable to differing ages among individuals.

Alcohol Use Disorders

A medical condition characterized by an impaired ability to stop or control alcohol use despite adverse social, occupational, or health consequences.

Delirium Tremens

A severe form of alcohol withdrawal characterized by sudden and severe mental or nervous system changes.

Auditory Hallucinations

The experience of hearing sounds or voices that do not exist outside the mind, often associated with mental health disorders like schizophrenia.