Use the following to answer questions: 
-(Figure: Fiscal Policy I) Refer to Figure: Fiscal Policy I. Suppose that this economy is in equilibrium at E1. If there is an increase in government purchases, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.
Definitions:
Sensorimotor Development
Sensorimotor Development is the stage in early childhood where infants learn to interact with their environment through sensory experiences and motor activities.
Object Permanence
The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed; typically developed during infancy.
Abstract Thinking
The ability to think about objects, principles, and ideas that are not physically present. It involves processing complex concepts, making generalizations, and understanding metaphors and analogies.
Sequential Intellectual Stages
Phases of cognitive development through which individuals progress, one after the other, each stage building upon the achievements of the previous ones.
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