|An economy is in a below​ full-employment equilibrium.   What is the effect on aggregate demand and real​ GDP, and the price level of fiscal stimulus that returns the economy to full​ employment?   What is an example of fiscal stimulus that returns the economy to full employment from a below​ full-employment equilibrium? Fiscal stimulus that returns the economy to full employment​ _______ aggregate demand and real​ GDP, and the price level​ _______.     A. ​increases; falls   B. ​decreases; falls   C. does not​ change; does not change   D. ​increases; rises The fiscal stimulus that returns the economy to full employment from a below​ full-employment equilibrium​ _______.     A. could be an increase in government expenditure and an equal increase in taxes   B. could be a decrease in government expenditure and an equal decrease in taxes   C. must be a decrease in taxes   D. must be an increase in government expenditure

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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​|An economy is in a below​ full-employment equilibrium.
 
What is the effect on aggregate demand and real​ GDP, and the price level of fiscal stimulus that returns the economy to full​ employment?
 
What is an example of fiscal stimulus that returns the economy to full employment from a below​ full-employment equilibrium?
Fiscal stimulus that returns the economy to full employment​ _______ aggregate demand and real​ GDP, and the price level​ _______.
 
 
A.
​increases; falls
 
B.
​decreases; falls
 
C.
does not​ change; does not change
 
D.
​increases; rises
The fiscal stimulus that returns the economy to full employment from a below​ full-employment equilibrium​ _______.
 
 
A.
could be an increase in government expenditure and an equal increase in taxes
 
B.
could be a decrease in government expenditure and an equal decrease in taxes
 
C.
must be a decrease in taxes
 
D.
must be an increase in government expenditure
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