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If the Economy Is in Equilibrium at $400 Billion of GDP

Question 22

Multiple Choice

If the economy is in equilibrium at $400 billion of GDP and the full-employment GDP is $500 billion,


A) real and nominal GDP will both increase.
B) GDP will remain at $400 billion unless aggregate expenditures change.
C) real GDP will increase, but nominal GDP will decrease.
D) the price level will increase.

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