Exhibit 12-2 -In an Economy Characterized by the Aggregate Expenditure Line in Expenditure

question 14

Multiple Choice

Exhibit 12-2
-In an economy characterized by the aggregate expenditure line in Exhibit 12-2, how would a $100 decrease in autonomous government spending impact real GDP?

• A)decrease real GDP by $200
• B)decrease real GDP by $100
• C)no impact on real GDP
• D)increase real GDP by $100
• E)increase real GDP by $200

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Definitions:

Metamorphic Minerals

Minerals formed through the process of metamorphism, which involves the alteration of mineralogical composition of pre-existing rocks under conditions of high temperature and pressure.

Garnet

A fairly common silicate mineral with a distinctive shape but nearly any color (red is most common).

Chlorite

Chlorite refers to a group of minerals that often occurs as green flakes in metamorphic rocks and is characterized by its sheet silicate structure.

Thrust Fault

A type of geological fault where one rock stratum is pushed up and over another because of compressional forces, often associated with mountain building.