Consider the Following News Headline: "Governments Plan Massive Hospital Construction

question 40

Multiple Choice

Consider the following news headline: "Governments plan massive hospital construction programs across the country." Choose the statement below that best describes the likely macroeconomic effects.

• A)the AD curve shifts to the left; the price level falls and real GDP falls
• B)the AD curve shifts to the right; the price level rises and real GDP rises
• C)the AD curve shifts to the right and the AS curve shifts to the left; the price level rises and the effect on real GDP is indeterminate
• D)the AD curve shifts to the left and the AS curve shifts to the right; the price level falls and the effect on real GDP is indeterminate
• E)the AD and AS curves both shift to the right; the effect on the price level is indeterminate and real GDP rises

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