Question
6. Suppose a country increases government purchases by $100 billion. Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion. a.In which
6. Suppose a country increases government purchases by $100 billion. Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion.
a.In which direction will the aggregate demand curve shift and by how much?
b.Explain using a graph why the change in real GDP is likely to be smaller than the shift in the aggregate demand curve.
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Microeconomics
Authors: Jeffrey M. Perloff
8th edition
134519531, 978-0134519531
