Use the following graph to answer the next question.
The economy is at equilibrium at point C, which is below potential output. What fiscal policy would increase real GDP?
A. Shift aggregate demand to the right by increasing government purchases.
B. Shift aggregate demand to the right by increasing taxes.
C. Shift aggregate demand to the left by decreasing government purchases.
D. Shift aggregate demand to the left by decreasing taxes.
Answer: A
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For a given amount of total reserves, a decrease in required reserves causes an increase in excess reserves.
a. true b. false
In 2017, approximately what percent of Americans were below the poverty line?
A. 2 percent. B. 8 percent. C. 36 percent. D. 12 percent.
Stagflation can be defined as a situation characterized by
A. rising prices and rising output. B. rising prices and falling output. C. falling prices and falling output. D. falling prices and rising output.
Figure 9.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), what fraction of used cameras sold will actually be lemons (low quality)?
A. 10/25 B. 10/35 C. 25/35 D. All of the cameras sold will be lemons.