If the Government Increases Aggregate Demand When the Economy Is

question 190

Multiple Choice

If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to

• A) increase real Gross Domestic Product (GDP).
• B) increase the price level.
• C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
• D) decrease both real Gross Domestic Product (GDP) and the price level.

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Definitions:

Immune Response

The body's defensive reaction to foreign substances or pathogens, involving immune cells and antibodies.

Tiredness

A state of fatigue or exhaustion that results from physical or mental exertion.

Pale Appearance

A physical condition where the skin appears lighter or less colorful than normal, often an indicator of illness or distress.