Solved

Use the Following to Answer Questions

Question 11

Multiple Choice

Use the following to answer questions: Use the following to answer questions: -(Figure: Fiscal Policy II) Refer to Figure: Fiscal Policy II. 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 II) Refer to Figure: Fiscal Policy II. 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

Q6: If the economy is at potential output

Q7: Use the following to answer questions: <img

Q8: If _, expansionary fiscal policy is most

Q9: Use the following to answer questions: <img

Q10: An inflationary gap can be closed with:<br>A)

Q12: Expansionary fiscal policy:<br>A) increases long-run aggregate supply.<br>B)

Q13: Which example does NOT illustrate government purchases

Q14: Use the following to answer questions: <img

Q15: The decision to build more aircraft carriers

Q16: Use the following to answer questions: <img