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Use the Following to Answer Questions

Question 55

Multiple Choice

Use the following to answer questions .
Exhibit: Fiscal Policy 1 Use the following to answer questions . Exhibit: Fiscal Policy 1 -(Exhibit: Fiscal Policy 1) . Assume that the economy is initially at Y<sub>1</sub>. A nonintervention policy would result in the restoration of potential output by allowing the A) the aggregate demand curve to shift to the right. B) the short-run aggregate supply curve to shift to the right. C) the aggregate demand curve to shift to the left. D) the short-run aggregate supply curve to shift to the left.
-(Exhibit: Fiscal Policy 1) . Assume that the economy is initially at Y1. A nonintervention policy would result in the restoration of potential output by allowing the


A) the aggregate demand curve to shift to the right.
B) the short-run aggregate supply curve to shift to the right.
C) the aggregate demand curve to shift to the left.
D) the short-run aggregate supply curve to shift to the left.

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