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Question 49

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Use the following to answer questions: Use the following to answer questions: -(Figure: Short- and Long-Run Equilibrium II) Refer to Figure: Short- and Long-Run Equilibrium II. If the economy is at equilibrium at E<sub>1</sub>, the government should use _____ fiscal policy to shift the aggregate demand curve to the _____. A) expansionary; right B) expansionary; left C) contractionary; right D) contractionary; left
-(Figure: Short- and Long-Run Equilibrium II) Refer to Figure: Short- and Long-Run Equilibrium II. If the economy is at equilibrium at E1, the government should use _____ fiscal policy to shift the aggregate demand curve to the _____.


A) expansionary; right
B) expansionary; left
C) contractionary; right
D) contractionary; left

Correct Answer:

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