-Refer to Figure 15-7

question 168

Multiple Choice

-Refer to Figure 15-7.If the economy is currently at a price level of 120 and real GDP is $6.5 trillion,an increase in government purchases will,in the short run,

• A) shift the aggregate demand curve rightward,increasing both the price level and real GDP
• B) shift the aggregate demand curve leftward,decreasing both the price level and real GDP
• C) shift the aggregate supply curve upward,increasing the price level and decreasing real GDP
• D) shift the aggregate supply curve downward,decreasing the price level and increasing real GDP
• E) have no effect on aggregate demand because of crowding out

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Definitions:

Objective Attributes

Features or characteristics of a product or service that can be quantitatively measured.

Subjective Attributes

Characteristics of an object, service, or product assessed based on opinions, feelings, and experiences rather than objective measures.

Unbiased Purchase Decision

A buying decision made by consumers based on objective information and without undue influence from marketing or personal biases.

Product-rating Organizations

Independent bodies that evaluate and rate the quality, safety, or performance of various products and services.