Figure 1212 Alt Text for Figure 12

question 120

Multiple Choice

Figure 12.12 Alt text for Figure 12.12: In figure 12.12, a graph depicting the changes in aggregate demand.
Long description for Figure 12.12: The x-axis is labelled, real GDP (trillions of 2007 dollars) , and the y-axis is labelled, price level (CPI) .2 lines are shown; AD1 and AD2.Line AD1 begins at the top left corner and slopes down to the bottom center.Line AD2 follows the same slope as line AD1, but is plotted to the right.Point A is plotted approximately 3 quarters of the way along line AD1.Point B is plotted less than half way along line AD2.Points A and B are connected to the y-axis with a line, and the area between lines AD1 and AD2 is indicated by a right pointing arrow.
-Refer to Figure 12.12.If government purchases increase by $10 billion and lead to an ultimate increase in aggregate demand as shown in the graph above, the difference in real GDP between point A and point B will be

• A)$10 billion.
• B)less than $10 billion.
• C)more than $10 billion.
• D)There is insufficient information given here to draw a conclusion.

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Definitions:

Interest Earned

The income received from lending funds or depositing money into interest-bearing accounts.

Invested

To have allocated resources, such as money, toward something with the expectation of generating income or profit.

Deposited

The act of placing money or another form of value into an account.

Interest

The cost of borrowing money or the payment received for deposit funds, calculated as a percentage of the principal.