Figure 16-12 -Refer to Figure 16-12.An Increase in Government Purchases Causes Aggregate

question 68

Multiple Choice

Figure 16-12
-Refer to Figure 16-12.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.

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Definitions:

Generalizable

The extent to which the findings from a study can be applied or extended to groups or situations beyond the initial research setting.

Real-Life Situations

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