Exhibit 10-6
-Refer to Exhibit 10-6.If investment increases,it follows that
A) the TE curve will shift upward, possibly passing through point 2.
B) the TE curve will shift downward, possibly passing through point 3.
C) the TE curve will not change but the economy will move from point 1 to point 3.
D) the TE curve will not change but the economy will move from point 1 to point 2.
E) At the new equilibrium position, Real GDP will necessarily be Q1.
Correct Answer:
Verified
Q121: Exhibit 10-6 Q121: The change in disposable income is $200 Q124: The more nearly horizontal the aggregate supply Q127: In the simple Keynesian model,an increase in Q146: Autonomous spending rises by $10 billion and Q148: The economy is in equilibrium,TP = TE,and Q149: The answer is: 1/(1 - MPC).What is Q152: John Maynard Keynes was a very famous Q156: The economy is in equilibrium,TP = TE,and Q161: John Maynard Keynes was the son of
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