Suppose the economy is initially at a point where real GDP equals potential GDP. In the following table, indicate any short-run and long-run changes relative to the baseline as a result of an increase in government purchases. Consumption Investment Net Exports Real GDP Short run Long run 1 No change : Decrease # Increase

Suppose the economy is initially at a point where real GDP equals potential GDP. In the following table, indicate any short-run and long-run changes relative to the baseline as a result of an increase in government purchases. Consumption Investment Net Exports Real GDP Short run Long run 1 No change : Decrease # Increase

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 7TY

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