Macroeconomics 11th Edition by Michael Parkin

تمرين 25

Use the following data to work Problem.
Suppose that the economy is at full employment, the price level is 100, and the multiplier is 2. Investment increases by $100 billion.
a. In the long run, does real GDP increase by more than, less than, or the same amount as the immediate increase in the quantity of real GDP demanded?
b. Explain how the price level changes in the long run.