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When the Aggregate Expenditure Curve Is Above the 45 Degree

Question 7

Multiple Choice

When the aggregate expenditure curve is above the 45 degree line:


A) there will be excess demand in the economy and GDP will increase
B) there will be insufficient demand in the economy and GDP will decrease
C) there will be insufficient demand in the economy and GDP will increase
D) there will be excess demand in the economy and GDP will decrease

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