Compare the shift of the AD curve with the $1 trillion increase in investment. Explain the magnitude
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The figure shows the aggregate demand curve in an economy. Suppose that aggregate planned expenditure increases by $0.75 trillion for each $1 trillion increase in real GDP.
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FIGURE 14.2 Chapter Checkpoint Assignable Problems 7,8 Price level (GDP price index) 115 105 95 AD Real GDP (trillions of 2009 dollars)
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The AD curve shifts rightward by 4 trillion dollars The ov...View the full answer
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