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Refer to the Graph Shown

Question 58

Multiple Choice

Refer to the graph shown.Given the increase in the price level in the graph, it is likely that the multiplier effect: Refer to the graph shown.Given the increase in the price level in the graph, it is likely that the multiplier effect: A) reduces the quantity of aggregate demand by Y<sub>o</sub> - Y<sub>e.</sub> B) reduces the quantity of aggregate demand by less than Y<sub>0</sub> - Y<sub>e.</sub> C) raises the quantity of aggregate demand by Y<sub>0</sub> - Y<sub>e.</sub> D) raises the quantity of aggregate demand by less than Y<sub>0</sub> - Y<sub>e.</sub>


A) reduces the quantity of aggregate demand by Yo - Ye.
B) reduces the quantity of aggregate demand by less than Y0 - Ye.
C) raises the quantity of aggregate demand by Y0 - Ye.
D) raises the quantity of aggregate demand by less than Y0 - Ye.

Correct Answer:

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