Exhibit 25-1 -Suppose the Economy Is Initially at Point a in Exhibit

question 25

Multiple Choice

Exhibit 25-1
-Suppose the economy is initially at point A in Exhibit 25-1. If government purchases increase, which point best depicts where the economy will be in the short run as a result of the change in spending?

• A)F
• B)D
• C)B
• D)E

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