Exhibit 25-1 
-Suppose the economy is initially at point A in Exhibit 25-1. If government purchases increase, which point best depicts where the economy will be in the short run as a result of the change in spending?
A) F
B) D
C) B
D) E
E) C
Correct Answer:
Verified
Q7: When government purchases decrease, the short-run effect
Q8: In a diagram that includes both the
Q9: The economic fluctuations model is used by
Q10: The long run is usually
A)ten years or
Q11: The long-run effect of a change in
Q13: The short run is usually
A)less than half
Q14: The short-run effects of an increase in
Q15: If real GDP is below potential GDP,
A)long-run
Q16: If real GDP stays below potential GDP,
A)the
Q17: The long-run effect of a decrease in
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