Figure 27-11
-Refer to Figure 27-11. If government purchases increase by $100 billion and lead to an ultimate increase in aggregate demand as shown in the graph below, the difference in real GDP between point A and point B will be

Question

Figure 27-11 
-Refer to Figure 27-11. If government purchases increase by $100 billion and lead to an ultimate increase in aggregate demand as shown in the graph below, the difference in real GDP between point A and point B will be

Quizplus · Accepted Answer

The increase in government purchases is shown to shift AD to the right from AD1 to AD2, causing an increase in real GDP from $12 trillion at point A to over $13 trillion at point B. Therefore, the difference in real GDP between point A and point B will be more than $100 billion.

Figure 27-11 -Refer to Figure 27-11. If Government Purchases Increase by $100