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Suppose the shift from AD0 to AD1 and from AS0 to AS1 is the result of fiscal policy. If the effect on _{--------------------}aggregate supply was larger than the figure above shows, as a result the price level would be_{--------------------}
110 and real GDP would be _{--------------------}$14 trillion.

Question

- Suppose the shift from AD0 to AD1 and from AS0 to AS1 is the result of fiscal policy. If the effect on <sub>--------------------</sub>aggregate supply was larger than the figure above shows, as a result the price level would be<sub>--------------------</sub> 110 and real GDP would be <sub>--------------------</sub>$14 trillion. A) smaller than; less than B) equal to; larger than C) equal to; equal to D) higher than; larger than E) smaller than; larger than

Quizplus · Accepted Answer

If the effect on aggregate supply was larger, it would shift AS further to the right, reducing the price level and increasing real GDP.

- Suppose the Shift from AD0 to AD1 and from AS0