Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
-(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is an increase in government spending, holding everything else constant, which outcome is likely to occur?

A) an increase in the nominal GDP
B) a decrease in the real GDP
C) an increase in the unemployment rate
D) a decrease in the inflation rate