Figure 16-12 -Refer to Figure 16-12.An Increase in Government Purchases Causes Aggregate

Multiple Choice

Figure 16-12
-Refer to Figure 16-12.An increase in government purchases causes aggregate demand to shift ultimately from AD₁ to AD₂.In the new equilibrium at point B,both real GDP and the price level have increased.The increase in real GDP is ________ than that indicated by the multiplier effect with a constant price level.

A) equal to
B) less than
C) greater than
D) There is insufficient information given here to draw a conclusion.