In a macro model with a constant price level, an increase in government purchases will cause the AE curve to shift
A) upward and the AD curve to shift to the left.
B) downward and a movement to the right along the AD curve.
C) downward and the AD curve to shift to the left.
D) upward and the AD curve to shift to the right.
E) downward and the AD curve to shift to the right.
Correct Answer:
Verified
Q1: Suppose there is an exogenous increase in
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