Suppose That in a Particular Economy, the Multiplier Is Equal

question 356

Multiple Choice

Suppose that in a particular economy, the multiplier is equal to 5. In terms of aggregate demand and aggregate supply, this value for the multiplier means that after an increase in investment

• A) at each level of real GDP, the aggregate demand curve shifts upward by an amount equal to 5 times the change in investment.
• B) at each level of real GDP, the aggregate supply curve shifts upward by an amount equal to 5 times the change in investment.
• C) at each price level, the aggregate supply curve shifts rightward by an amount equal to 5 times the change in investment.
• D) at each price level, the aggregate demand curve shifts rightward by an amount equal to 5 times the change in investment.

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Definitions:

Cherokee

A Native American people originally from the southeastern United States, forced to relocate to Oklahoma via the Trail of Tears during the 1830s.

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Cotton Growers

Individuals or entities involved in the cultivation of cotton plants, which is a significant agricultural activity in regions with suitable climates for this crop.

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Refers to the labor force comprising predominantly of white individuals working in the mining industry, often associated with historical mining operations in various parts of the world.