Solved

Use the Following to Answer Questions

Question 79

Multiple Choice

Use the following to answer questions: Use the following to answer questions: -(Figure: Fiscal Policy I) Refer to Figure: Fiscal Policy I. Suppose that this economy is in equilibrium at E<sub>1</sub>. If there is an increase in government purchases, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP. A) AD<sub>2;</sub> left; increase; decrease B) AD<sub>2;</sub> left; decrease; decrease C) AD<sub>1;</sub> right; increase; increase D) AD<sub>1;</sub> right; decrease; increase
-(Figure: Fiscal Policy I) Refer to Figure: Fiscal Policy I. Suppose that this economy is in equilibrium at E1. If there is an increase in government purchases, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.


A) AD2; left; increase; decrease
B) AD2; left; decrease; decrease
C) AD1; right; increase; increase
D) AD1; right; decrease; increase

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q74: Use the following to answer questions: <img

Q75: The basic equation of national income accounting

Q76: Use the following to answer questions: <img

Q77: Consumer spending will likely rise if:<br>A) government

Q78: Use the following to answer questions: <img

Q80: Which statement is NOT an argument against

Q81: Use the following to answer questions: <img

Q82: Use the following to answer questions: <img

Q83: Policy makers use a contractionary fiscal policy

Q84: Government spending will NOT crowd out private