-Which of the Following Statements Best Describes the Effect of an Increase

question 2

Multiple Choice

-Which of the following statements best describes the effect of an increase in aggregate demand?

• A)The change in equilibrium real output exceeds the change in government purchases times the spending multiplier because of a fall in the equilibrium price level.
• B)The change in equilibrium real output is less than the change in government purchases times the spending multiplier because of a rise in the equilibrium price level.
• C)The change in equilibrium real output is less than the change in government purchases times the spending multiplier because of a fall in the equilibrium price level.
• D)The change in equilibrium real output exceeds the change in government purchases times the spending multiplier because of a rise in the equilibrium price level.
• E)The change in equilibrium real output is the same as the change in government purchases times the spending multiplier.

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Definitions:

Parathyroid Hormone

A hormone secreted by the parathyroid glands that regulates calcium levels in a person's body.

Blood Calcium Levels

The concentration of calcium in the blood, crucial for various physiological processes including bone formation and muscle contraction.

Amino Acid Derivatives

Simplest hormones, such as epinephrine and melatonin, that are derived from amino acids.

Fatty Acid Derivatives

Prostaglandins, juvenile hormones of insects, and other compounds derived from fatty acids.