Question

The simple multiplier effect shows the resulting change in real GDP due to an increase in government purchases or a decrease in taxes assuming that the price level is_____.In reality, the SRAS is _____.As a result, when AD shifts to the right, in reality the change in real GDP will be _____ it would be if the price level were constant.

Answer 1

Answer:

Constant

Upward slopping

Less than

Explanation:

The simple multiplier effect shows the resulting change in real GDP due to an increase in government purchases or a decrease in taxes assuming that the price level is___constant__.In reality, the SRAS is __upward slopping___.As a result, when AD shifts to the right, in reality the change in real GDP will be __less than___ it would be if the price level were constant.

When the government purchases rises or their is reduction in tax paid on constant price of commodity, the gross domestic development of the country will increase geometrically.

In reality, the Short-Run Aggregate Supply Curve slop will tends to move upward. When AD shifts to the right, in reality the change in real GDP will be less than it would be if the price level were constant