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Use the following to answer questions: Use the following to answer questions:   -(Figure: Fiscal Policy II)  Refer to Figure: Fiscal Policy II. Suppose that this economy is in equilibrium at E<sub>1</sub>. If there is an increase in government purchases, _____ will shift to the _____, causing a(n)  _____ in the price level and a(n)  _____ in real GDP. A)  AD<sub>2;</sub> left; increase; decrease B)  AD<sub>2;</sub> left; decrease; decrease C)  AD<sub>1;</sub> right; increase; increase D)  AD<sub>1;</sub> right; decrease; increase
-(Figure: Fiscal Policy II) Refer to Figure: Fiscal Policy II. Suppose that this economy is in equilibrium at E1. If there is an increase in government purchases, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.


Definitions:

Pie Chart

A circular statistic graphic, which is divided into slices to illustrate numerical proportion. Each slice represents a category's contribution to the total.

Line Graph

A type of chart used to display information as a series of data points connected by straight line segments, often to show trends over time.

Cumulative Frequency

The sum of a class and all classes below it in a frequency distribution.

Frequency Polygon

A graphical representation of the distribution of a dataset that shows the frequency of data points within certain intervals.

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