When an Increase in Government Purchases Increases Aggregate Demand, What

question 87

Multiple Choice

When an increase in government purchases increases aggregate demand, what happens to the Solow growth curve in the long run?

• A) It has a lower GDP growth rate than before the government purchases.
• B) It has the same GDP growth rate as before the government purchases.
• C) It has a higher GDP growth rate than it had before the government purchases.
• D) It has a GDP growth rate that continues to grow.

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Definitions:

T-account

A simplified accounting tool used to understand the effects of transactions on individual accounts, visually structured as a 'T'.