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Author Question: A decrease in aggregate expenditure has what result on equilibrium GDP? A) Equilibrium GDP falls. ... (Read 76 times)

sam.t96

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on: Jun 29, 2018
A decrease in aggregate expenditure has what result on equilibrium GDP?
 
  A) Equilibrium GDP falls.
  B) Equilibrium GDP rises.
  C) Equilibrium GDP is not affected by a decrease in aggregate expenditure.
  D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP.

Question 2

Refer to Figure 27-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
 
  A) increase government spending B) contractionary fiscal policy
  C) increase taxes D) decrease interest rates


Anna

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

A


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