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Suppose the Multiplier Is 2 and the Short-Run Aggregate Supply

Question 117

Multiple Choice

Suppose the multiplier is 2 and the short-run aggregate supply curve is positively sloped. Investment increases by $10 billion. In the short run, equilibrium real GDP


A) increases by $20 billion.
B) increases by more than $20 billion.
C) decreases by less than $20 billion.
D) does not change.
E) increases by less than $20 billion.

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