Exhibit 23-6 
-According to Exhibit 23-6, line abd shows the path of potential GDP. In Year 2, suppose the expenditure line intersects the 45-degree line at the level of spending corresponding to point b. If, in Year 3, the economy is at point c, then
A) the expenditure line has shifted up the 45-degree line more than it would have if real GDP equaled potential GDP in Year 3.
B) the expenditure line has shifted down the 45-degree line.
C) the expenditure line has shifted up the 45-degree line and equals a level of income greater than real GDP.
D) the expenditure line has shifted up the 45-degree line to a point where real GDP equals potential GDP in Year 3.
E) potential GDP has risen, and we've moved to a new point of spending balance.
Correct Answer:
Verified
Q148: Which of the following statements is true?
A)A
Q149: Exhibit 23-6 Q150: Suppose the economy is booming and many Q151: The Keynesian multiplier measures Q152: Describe what happens to the aggregate expenditure Q154: Assume initially that real GDP is equal Q155: Suppose you read in the paper that Q156: Suppose the information in the following table Q157: Answer the questions below: Q158: Which of the following measures the change
A)both the short-run and
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