An Initial Increase in Government Purchases of $200 Billion Will

question 78

Multiple Choice

An initial increase in government purchases of $200 billion will shift the aggregate demand curve to the right by:

• A)$200 billion.
• B)less than $200 billion.
• C)more than $200 billion.
• D)None of these options is correct. This policy shifts the long-run aggregate supply curve.

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