If the Government Increases Aggregate Demand When the Economy Is

question 190

Multiple Choice

If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to

• A) increase real Gross Domestic Product (GDP).
• B) increase the price level.
• C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
• D) decrease both real Gross Domestic Product (GDP) and the price level.

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Definitions:

Blood Pressure

The force that circulating blood exerts against the walls of the arteries.

Physical Activity

An activity that requires bodily movement, producing an increase in heart rate and energy expenditure beyond resting levels.

Prevention Strategy

A plan or approach designed to avert or reduce the risk of diseases and other health problems before they occur.

Sodium

A chemical element (Na) that plays a crucial role in maintaining normal fluid balance and is necessary for proper muscle and nerve function.