Refer to the figure above. The economy is at equilibrium at point B. What would expansionary fiscal policy do?
Move the economy from point B upward along AD2
Move the economy from point B towards point C
Move the economy from point B downward along AD2
Move the economy from point B towards point A
Move the economy from point B towards point A
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If a society uses the market system, only markets are available to solve all of its problems.
Answer the following statement true (T) or false (F)
A perfectly competitive firm has a random marginal cost with a 60 percent chance of a high marginal cost of $100 and a 40 percent chance of a low marginal cost of $90. What is the firm's expected marginal cost?
A) $94 B) $98 C) $92 D) $96
If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are less than the external costs,
a. Taxing it could bring us closer to the efficient solution b. Subsidizing it could bring us closer to the efficient solution c. Neither a tax or a subsidy could bring us closer to the efficient solution d. None of the above is true.
According to monetarists, changes in velocity can
A) lower GDP B) raise GDP C) shift the SRAS, but not the LRAS D) a and b E) a, b and c