Refer to the Information Provided in Figure 32

Multiple Choice

Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2
-Refer to Figure 32.2. According to ________, a(n) ________ fiscal policy in the long run and after all the adjustments have been made increases price level above P₁, but does not change equilibrium output.

A) Keynes; contractionary
B) Keynes; expansionary
C) monetarists; expansionary
D) the new classicals; contractionary