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Figure 13.1 -Refer to Figure 13.1. Assume That the Economy Is in the Economy

Question 2

Multiple Choice

Figure 13.1

-Refer to Figure 13.1. Assume that the economy is in equilibrium at point B. If government spending increases, causing AD<sub>2 </sub>to shift to AD<sub>3</sub>, the absolute change in real GDP would be

Figure 13.1

-Refer to Figure 13.1. Assume that the economy is in equilibrium at point B. If government spending increases, causing AD₂to shift to AD₃, the absolute change in real GDP would be

A) the same as the change resulting from an equal decrease in government spending from equilibrium point B.
B) greater than the change resulting from an equal decrease in government spending from equilibrium point B.
C) less than the change resulting from an equal decrease in government spending from equilibrium point B.
D) zero.
E) greater than if the economy had been in equilibrium at point A.

Correct Answer: