If Prices Are Fixed, an Increase in Aggregate Expenditures Results

question 426

Multiple Choice

If prices are fixed, an increase in aggregate expenditures results in an increase in equilibrium GDP that

• A) is greater than the change in aggregate expenditure.
• B) is equal to the change in aggregate expenditure.
• C) is less than the change in aggregate expenditure.
• D) has no necessary relationship to the size of the change in aggregate expenditure.

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Definitions:

Empirical

Based on, concerned with, or verifiable by observation or experience rather than theory or pure logic.

Necessary

A condition or requirement that is indispensable or essential for something to occur or be the case.

Rationalists

Philosophers or thinkers who emphasize reason, logic, and intellect over sensory experience or empirical evidence as the primary sources of knowledge.

Coherence

The property of being a unified whole, with all elements fitting together well.