Refer to the graph shown. Assume the economy is in short-run equilibrium at point A below potential output. The government opts for an expansionary fiscal policy that shifts the AD curve from AD0 to AD1 in an attempt to pull the economy out of the recession. An economist with a functional finance view, who also recognizes that there will be a certain degree of crowding out, would conclude that the economy will likely end up at point:
A. A.
B. B.
C. C.
D. D.
Answer: B
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Answer the following statement true (T) or false (F)
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Some nations avoid the effects of trade deflection in a trade bloc by enforcing
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