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Question 109

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Use the following to answer questions: Use the following to answer questions: -(Figure: Fiscal Policy Options) Refer to Figure: Fiscal Policy Options. If the aggregate demand curve is AD'': A) the economy is in long-run equilibrium. B) an expansionary fiscal policy may be warranted. C) a contractionary fiscal policy may be warranted. D) the economy is in a recessionary gap.
-(Figure: Fiscal Policy Options) Refer to Figure: Fiscal Policy Options. If the aggregate demand curve is AD'':


A) the economy is in long-run equilibrium.
B) an expansionary fiscal policy may be warranted.
C) a contractionary fiscal policy may be warranted.
D) the economy is in a recessionary gap.

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