Refer to the figure above. If AD₁ shifts to AD₂, the full multiplier effect would be an increase in real GDP from: A) Q₁ to Q₂ B) Q₁ to Q₃ C) Q₂ to Q₃ D) Q₂ to more than Q₃

Question

Quizplus · Accepted Answer

Shifting from AD₁ to AD₂ would result in an increase in aggregate demand, shifting the AD curve to the right. This would result in an increase in equilibrium output from Q₁ to a higher level, potentially Q₃. Option B offers the closest answer to this potential increase in output, as it is the only option that includes Q₃.

Refer to the Figure Above