Figure 13.1

-Refer to Figure 13.1. If the economy is in equilibrium at point C, then, other things being equal, an increase in government spending will

Question

Figure 13.1
 
-Refer to Figure 13.1. If the economy is in equilibrium at point C, then, other things being equal, an increase in government spending will

Quizplus · Accepted Answer

An increase in government spending typically shifts the aggregate demand curve to the right, leading to a higher price level while leaving the real GDP unchanged if the economy is already at full employment, as indicated by point C on the aggregate supply curve.

Figure 13.1 -Refer to Figure 13.1. If the Economy Is in Equilibrium