-Refer to Figure 15-7

question 168

Multiple Choice

-Refer to Figure 15-7.If the economy is currently at a price level of 120 and real GDP is $6.5 trillion,an increase in government purchases will,in the short run,

• A) shift the aggregate demand curve rightward,increasing both the price level and real GDP
• B) shift the aggregate demand curve leftward,decreasing both the price level and real GDP
• C) shift the aggregate supply curve upward,increasing the price level and decreasing real GDP
• D) shift the aggregate supply curve downward,decreasing the price level and increasing real GDP
• E) have no effect on aggregate demand because of crowding out

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