Which of the following correctly describes the mechanics of the spending multiplier?
a. An initial increase in aggregate expenditures, such as an increase in government spending, shifts the aggregate expenditures curve upward vertically.
b. After the expenditures curve shifts upwards, the economy is not in equilibrium because aggregate expenditures now exceed aggregate output, leading to
inventory depletion.
c. Real GDP increases in response to inventory depletion, eventually leading to a new higher level equilibrium real GDP.
d. All of the above answers are correct.
d
Economics
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Why should productivity be measured?
A. To find new ways to meet customer needs B. To see whether the business's objectives are being met C. To determine the best ways to invest company profits D. To locate new
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