Figure 18-12 -Refer to Figure 18-12.An Increase in Government Purchases Causes Aggregate

question 283

Multiple Choice

Figure 18-12

-Refer to Figure 18-12.An increase in government purchases causes aggregate demand to shift ultimately from AD₁ to AD₂.In the new equilibrium at point B,both real GDP and the price level have increased.The increase in real GDP is ________ than that indicated by the multiplier effect with a constant price level.

• A) equal to
• B) less than
• C) greater than
• D) There is insufficient information given here to draw a conclusion.

Recognize the implications of economic concepts such as oligopolies, capitalism, and socialism on society.

Comprehend the role of government intervention in economic activities.

Acknowledge the significance of property ownership in economic systems.

Distinguish between various forms of labour markets and their impact on workers.

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Definitions:

Net Income

The profit a company retains after deducting all costs, taxes, and expenses from its total revenue.

Time Devoted

The amount of time spent on a specific activity or task.

Liquidating Partnership

The process of dissolving a business partnership by selling off assets to pay liabilities and distributing the remaining assets to the partners.

Capital Account Balances

The amount recorded in the financial statements of an entity that represents the funds contributed by owners or partners, including retained earnings and additional paid-in capital.