Diagram 1 Price Level 0 ADO AD₁ g g Q₁ Real GDP A. ADO. B. ADI. C. AD2. D. AD3 AS 11. Refer to Diagram 1, in which Q is the full-employment output. A contractionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at: 12. Refer to Diagram 1, in which Qf is the full-employment output. An expansionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at: A. ADO. B. AS. C. AD2. D. AD3. 13. Refer to Diagram 1, in which Qr is the full-employment output. If the economy's current aggregate demand curve is AD1, it would be appropriate for the government to: A. reduce government expenditures and taxes by equal-size amounts. B. reduce government expenditures or increase taxes. C. increase government expenditures or reduce taxes. D. reduce unemployment compensation benefits.

Diagram 1 Price Level 0 ADO AD₁ g g Q₁ Real GDP A. ADO. B. ADI. C. AD2. D. AD3 AS 11. Refer to Diagram 1, in which Q is the full-employment output. A contractionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at: 12. Refer to Diagram 1, in which Qf is the full-employment output. An expansionary fiscal policy would be most appropriate if the economy's present aggregate demand curve were at: A. ADO. B. AS. C. AD2. D. AD3. 13. Refer to Diagram 1, in which Qr is the full-employment output. If the economy's current aggregate demand curve is AD1, it would be appropriate for the government to: A. reduce government expenditures and taxes by equal-size amounts. B. reduce government expenditures or increase taxes. C. increase government expenditures or reduce taxes. D. reduce unemployment compensation benefits.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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