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Exhibit: Aggregate Expenditures Curve
Figure 13-6
-(Exhibit: Aggregate Expenditures Curve) Suppose the government purchases economy rise by $100. What is the new equilibrium level of real GDP?
A) $1,700
B) $1,800
C) $1,900
D) $2,100

Question

Use the following to answer questions .
Exhibit: Aggregate Expenditures Curve
Figure 13-6 
-(Exhibit: Aggregate Expenditures Curve) Suppose the government purchases economy rise by $100. What is the new equilibrium level of real GDP?
A) $1,700 
B) $1,800 
C) $1,900 
D) $2,100

Quizplus · Accepted Answer

According to the exhibit, the original equilibrium level of real GDP is $1,700. If government purchases rise by $100, the aggregate expenditures curve shifts upward and the new equilibrium level of real GDP is where the aggregate expenditures curve intersects the 45-degree line, which is $1,800.

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