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Based on the Keynesian Theory of the Business Cycle, If

Question 139

Multiple Choice

Based on the Keynesian theory of the business cycle, if the economy is at its full- employment equilibrium and aggregate demand increases then


A) real GDP decreases and the price level remains unchanged.
B) the price level and GDP both decrease.
C) the price level rises but real GDP remains unchanged.
D) the price level and real GDP both increase.

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