The initial short-run equilibrium level of real GDP is _________ ($6 billion, $1
ID: 1145626 • Letter: T
Question
The initial short-run equilibrium level of real GDP is _________ ($6 billion, $10 billion, $12 billion), and the initial short-run equilibrium price level is _________ (102, 100, 104).
According to critics of Keynesian fiscal policy, which curve in the previous graph will most likely be the new aggregate demand curve?
a) AD2 b) AD1 c) AD3
As a result, the equilibrium level of real GDP will be _________ ($12 billion, $10 billion, $6 billion), and the equilibrium price level will be _______ (100, 102, 104).
According to critics of Keynesian fiscal policy, which of the following is true in this case?
(Choices in the photo above)
This is an example of _________ (complete crowding out, zero crowding out, incomplete crowding out).
Explanation / Answer
The initial short run level of real GDP is 10 billion and equilibrium price level is 100 where the SRAS and AD1 intersects. The answer is AD1 The equilibrium level of real GDP will be 10 billion and price level will be 100 The correct option is c Complete crowding out effect as interest rate will increase and investment will decrease.
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