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Exhibit 15.4 -Exhibit 15.4 Depicts Short-Run Equilibrium in an Aggregate Demand-Aggregate Supply

Question 131

Multiple Choice

Exhibit 15.4
Exhibit 15.4 -Exhibit 15.4 depicts short-run equilibrium in an aggregate demand-aggregate supply model. If the economy is at point e in the short run, which of these policies adopted by the Fed is likely to return it to long-run equilibrium? A) a decrease in government spending B) an increase in the tax rate C) a decrease in the tax rate D) a decrease in the money supply E) an increase in the money supply
-Exhibit 15.4 depicts short-run equilibrium in an aggregate demand-aggregate supply model. If the economy is at point "e" in the short run, which of these policies adopted by the Fed is likely to return it to long-run equilibrium?


A) a decrease in government spending
B) an increase in the tax rate
C) a decrease in the tax rate
D) a decrease in the money supply
E) an increase in the money supply

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