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:

Amortized

The process of gradually reducing a debt through regular payments over time, which include both principal and interest components.

Borrower Defaults

Borrower defaults occur when a borrower fails to meet the legal obligations of a loan, such as not making scheduled payments.

Legal Documents

Written instruments that express rights, duties, entitlements, or liabilities legally enforceable by judicial action.

Stocks And Bonds

Financial instruments that represent an ownership share in a company (stocks) and debt obligations of an entity (bonds), respectively.