Homework Answers
Initial equilibrium at point 1 when price is 115 and real GDP is 12.
Real GDP at price 115 is 13 when Investment rises by 0.5
When Investment rises by $0.5, aggregate demand curve shift from AD0 to AD1 which shift equilibrium point from "1" to "2" and raise output from 12 to 12.5.
We can see from the graph above that real GDP rises by same amount as rise in aggregate demand.
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