18. Use the AD/AS model to illustrate the following. Draw 6 graphs by hand. Show how the AD or the AS curve shift and in what direction (left or right). Also state what happens to equilibrium real GDP (Y), employment, and the equilibrium price level. [Note: Use the SRAS curve, not the LRAS.] a. an increase in government spending and/or transfer payments b. restrictive fiscal policy c. expansive monetary policy d. increase in investment according to Keynesians e. increase in investment according to supply-side economists f. a stock market crash
18. Use the AD/AS model to illustrate the following. Draw 6 graphs by hand. Show how the AD or the AS curve shift and in what direction (left or right). Also state what happens to equilibrium real GDP (Y), employment, and the equilibrium price level. [Note: Use the SRAS curve, not the LRAS.] a. an increase in government spending and/or transfer payments b. restrictive fiscal policy c. expansive monetary policy d. increase in investment according to Keynesians e. increase in investment according to supply-side economists f. a stock market crash
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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solve only D, E, F. G Not need to solve a. b.c
![18. Use the AD/AS model to illustrate the following. Draw 6
graphs by hand. Show how the AD or the AS curve shift and
in what direction (left or right). Also state what happens to
equilibrium real GDP (Y), employment, and the equilibrium
price level. [Note: Use the SRAS curve, not the LRAS.]
a. an increase in government spending and/or transfer
payments
b. restrictive fiscal policy
c. expansive monetary policy
d. increase in investment according to Keynesians
e. increase in investment according to supply-side economists
f. a stock market crash](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1aba5b6-40da-4125-8216-36d55e09c453%2F1e4da2a0-cca5-439b-93ee-54ae81f454a2%2Faya7xc5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:18. Use the AD/AS model to illustrate the following. Draw 6
graphs by hand. Show how the AD or the AS curve shift and
in what direction (left or right). Also state what happens to
equilibrium real GDP (Y), employment, and the equilibrium
price level. [Note: Use the SRAS curve, not the LRAS.]
a. an increase in government spending and/or transfer
payments
b. restrictive fiscal policy
c. expansive monetary policy
d. increase in investment according to Keynesians
e. increase in investment according to supply-side economists
f. a stock market crash
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