Solved

If the Economy Shown in the Figure Begins on AD1

Question 29

Multiple Choice

If the economy shown in the figure begins on AD1 and SRAS1, what will happen in the short run and long run if the government begins a sustained period of increased spending? If the economy shown in the figure begins on AD<sub>1</sub> and SRAS<sub>1</sub>, what will happen in the short run and long run if the government begins a sustained period of increased spending? A) The economy moves from point C to E to B. B) The economy moves from point D to C to A. C) The economy moves from point D to C to E. D) The economy moves from point C to A to B.


A) The economy moves from point C to E to B.
B) The economy moves from point D to C to A.
C) The economy moves from point D to C to E.
D) The economy moves from point C to A to B.

Correct Answer:

verifed

Verified

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

Related Questions

Q24: _ inflation occurs when a negative supply

Q25: Which of these will NOT shift the

Q26: Which event will shift the aggregate demand

Q27: The oil shock of 1973 led to

Q28: One reason the price level did not

Q30: If the money supply is fixed and

Q31: Which effect tends to make aggregate demand

Q32: The aggregate supply curve shows that the

Q33: (Figure: Predicting Aggregate Demand Shifts) Which of

Q34: (Figure: Determining SRAS Shifts 2) <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB8176/.jpg"