Multiple Choice
To understand how a change in government purchases affects real GDP in the short run, we need to focus on
A) the identity between real GDP and income and the identity between real GDP and potential GDP.
B) the consumption function and the identity between real GDP and income.
C) the identity between real GDP and income and the identity between disposable income and real GDP.
D) the consumption function and the identity between real GDP and disposable income.
E) the consumption function and the identity between real GDP and potential GDP.
Correct Answer:
Verified
Correct Answer:
Verified
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