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Exhibit 20A-2 Macro AD/AS Models

Question 12

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Exhibit 20A-2 Macro AD/AS Models
Exhibit 20A-2 Macro AD/AS Models -In Panel (b) of Exhibit 20A-2,the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂.If the federal government or Fed decides to intervene,it would most likely: A) decrease taxes. B) increase the money supply. C) increase the level of government spending for goods and services. D) decrease the level of government spending for goods and services.
-In Panel (b) of Exhibit 20A-2,the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂.If the federal government or Fed decides to intervene,it would most likely:


A) decrease taxes.
B) increase the money supply.
C) increase the level of government spending for goods and services.
D) decrease the level of government spending for goods and services.

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