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Refer to the Information Provided in Figure 27

Question 49

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Refer to the information provided in Figure 27.3 below to answer the question(s) that follow. Refer to the information provided in Figure 27.3 below to answer the question(s) that follow. Figure 27.3 -Refer to Figure 27.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS<sub>2</sub>. If the government decides to counter the effects of higher oil prices by increasing net taxes, then the price level will be ________ than P<sub>2</sub> and output will be ________ than Y<sub>2</sub>. A) greater; greater B) greater; less C) less; less D) less; greater Figure 27.3
-Refer to Figure 27.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS2. If the government decides to counter the effects of higher oil prices by increasing net taxes, then the price level will be ________ than P2 and output will be ________ than Y2.


A) greater; greater
B) greater; less
C) less; less
D) less; greater

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