Figure 27-9

-Refer to Figure 27-9.An increase in government purchases of $200 billion causes aggregate demand to shift ultimately from AD₁ to AD₂.Assuming a constant price level,the difference in real GDP between point A and point B will be ________ $200 billion.

Question

Figure 27-9
 
-Refer to Figure 27-9.An increase in government purchases of $200 billion causes aggregate demand to shift ultimately from AD₁ to AD₂.Assuming a constant price level,the difference in real GDP between point A and point B will be ________ $200 billion.

Quizplus · Accepted Answer

The increase in government purchases will have a multiplier effect on the economy, leading to a greater increase in real GDP than the initial $200 billion.

Figure 27-9 -Refer to Figure 27-9.An Increase in Government Purchases of $200