Refer to Figure 27-12. An increase in government purchases of $200 billion causes aggregate demand to shift ultimately from AD1 to AD2
Assuming a constant price level, the difference in real GDP between point A and point B will be ________ $200 billion.
A) less than
B) equal to
C) greater than
D) There is insufficient information given here to draw a conclusion.
C
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If the required reserve ratio is 100 percent, could the Federal Reserve still change the money supply with open market operations? Explain whether they could or could not
What will be an ideal response?
Prior to 2008, the bank's cost of holding reserves equaled
A) the interest paid on deposits times the amount of reserves. B) the interest paid on deposits times the amount of deposits. C) the interest earned on loans times the amount of loans. D) the interest earned on loans times the amount on reserves.
The key feature of monopolistic competition is
A) interdependence of the firms. B) lack of advertisement. C) product differentiation. D) the small number of firms in the industry.
Explain how unemployment insurance acts as an automatic stabilizer