Refer to the information provided in Figure 9.5 below to answer the questions that follow. Figure 9.5
-Refer to Figure 9.5. If the economy is in equilibrium and the government increases spending by $100 billion, equilibrium aggregate expenditures increase to $________ billion.

Question

Refer to the information provided in Figure 9.5 below to answer the questions that follow.  Figure 9.5
-Refer to Figure 9.5. If the economy is in equilibrium and the government increases spending by $100 billion, equilibrium aggregate expenditures increase to $________ billion.

Quizplus · Accepted Answer

According to the graph, equilibrium aggregate expenditures are at $1,800 billion. If the government increases spending by $100 billion, this will shift the AD curve to the right, resulting in a new equilibrium output of $2,000 billion (where AD intersects with the 45-degree line).

Refer to the Information Provided in Figure 9