How about this one?.... I think this is a clear one in the graph to the right, t

Question

How about this one?....
I think this is a clear one

in the graph to the right, the economy is inially in equilibrium at point A. Aggregate expenditure and real GDP both equal $10 0 trillion. Suppose there is an increase in investment spending of $200 billion that increases aggregate expenditure to $10.2 trilhion Which of the tollowing best describes the initial impact of the increase in investment? O A. Initially, real GDP rnises by $200 billion O B. The aggregate expenditure line shitts up by 5200 billion O C. The economy is no longer in equilibrium O D. All of the above All of the tollowing are true as the economy adjusts to a new equilibrium except that 45 Line the initial increase in income or GDP leads to a further increase in investment and aggregate expenditure O A. ?B. the final increase in GDP will be larger than O C. the economy wil arrive at an equibrium at O D. the innial increase in incame or GDP leads 5200btllion point B to a further increase in consumption and Click to select your answer ts 46 dchapp 3 4 5 6 7 2

Explanation / Answer

1) Solution: All of the above

Explanation: ?Initially, real GDP increases by ?$400 billion, and as a result the aggregate expenditure line shifts up by ?$400 billion. Due to it economy is no longer in equilibrium

2) Solution: the initial increase in income or GDP leads to a further increase in investment and aggregate expenditure.

Explanation: A rise in income or GDP results to a further increase in aggregate expenditure and investment

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.