Suppose the Aggregate Demand Curve in Figure 10

question 28

Multiple Choice

Suppose the aggregate demand curve in Figure 10.2 increases by a total of $60 billion,from AD₂ to AD_0. Equilibrium GDP will

• A)Increase by less than $60 billion because some of the additional spending drives up prices.
• B)Increase by $60 billion.
• C)Increase by more than $60 billion because of the multiplier effect.
• D)Decrease because higher inflation causes unemployment.

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Definitions:

Heart Disease

A range of conditions that affect the heart, including coronary artery disease, arrhythmias, heart failure, and others.

Thromboplastin

A plasma protein that plays a key role in the blood clotting process.

Clotting

The process by which blood changes from a liquid to a solid state, forming a clot to prevent excessive bleeding when vessels are injured.

Capillary Bed

A network of small blood vessels known as capillaries, which facilitate the exchange of oxygen, nutrients, and waste materials between the blood and tissues.