The economy is in equilibrium, TP = TE, and Real GDP is $4,555 billion. The MPC is 0.80, the multiplier is operative, and idle resources exist at each expenditure round. Government purchases rise by $10 billion. As a result, the __________ curve shifts __________, inventory levels unexpectedly __________, business firms ___________ the quantity of goods and services they produce, and Real GDP
__________ by __________.
A) TE; downward; fall; increase; rises; $10 billion.
B) TP; rightward; fall; decrease; falls; $50 billion
C) TE; upward; fall; increase; rises; $50 billion
D) TE; downward; rise; increase; rises, $50 billion
C
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