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Based on the Keynesian Theory of the Business Cycle, If

Question 49

Multiple Choice

Based on the Keynesian theory of the business cycle, if the economy is at its full-employment equilibrium and aggregate demand increases then


A) the price level and real GDP both increase.
B) the price level rises but real GDP remains unchanged.
C) the price level and GDP both decrease.
D) real GDP decreases and the price level remains unchanged.

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