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Suppose Real GDP Is $1

question 28

True/False

Suppose real GDP is $1.3 trillion and potential GDP is $1.35 trillion. If the government increases government purchases by $0.5 trillion, then the economy will be brought to equilibrium at potential GDP.


Definitions:

US$

The United States dollar, the official currency of the United States of America.

Euro

The official currency of the eurozone, represented by the symbol € and used by 19 of the 27 European Union countries.

Lowest Terms

The simplest form of a fraction, where the numerator and denominator are reduced to the smallest possible numbers.

Express

Refers to a service or method that is designed to be faster or more efficient than standard options.

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