Suppose the Multiplier Is 2 and the Short-Run Aggregate Supply

question 117

Multiple Choice

Suppose the multiplier is 2 and the short-run aggregate supply curve is positively sloped. Investment increases by $10 billion. In the short run, equilibrium real GDP

• A)increases by $20 billion.
• B)increases by more than $20 billion.
• C)decreases by less than $20 billion.
• D)does not change.
• E)increases by less than $20 billion.

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Definitions:

Triple Bond

A chemical bond in which three pairs of electrons are shared between two atoms, making it the strongest and shortest among the types of chemical bonds.

Covalent Bonds

Chemical bonds formed by the sharing of electrons between atoms, leading to stable molecules.

Electrons

Subatomic particles with a negative charge, found in electron shells surrounding the nucleus of an atom.

Benzene

A colorless, volatile liquid hydrocarbon present in coal tar and petroleum, used in chemical synthesis.