In the Simple Keynesian Model,an Increase in Aggregate Demand Leads

question 87

Multiple Choice

In the simple Keynesian model,an increase in aggregate demand leads to an increase in

• A) Real GDP and the price level at all levels of Real GDP.
• B) the price level and no change in Real GDP for levels of Real GDP below Natural Real GDP.
• C) the price level and a decrease in Real GDP at all levels of GDP.
• D) Real GDP and no change in the price level for levels of Real GDP below Natural Real GDP.

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Definitions:

Consumer Surplus

The difference between the amount consumers are willing to pay for a good or service versus what they actually pay.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.

Alfred Marshall

A prominent British economist known for his significant contributions to microeconomics and for popularizing the use of supply and demand graphs.