Author Question: Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.Refer ... (Read 13 times)

newyorker26 · **on:** Apr 19, 2019

Question 1

Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.

Refer to Figure 27.3. Assume the economy is at Point
A. Lower oil prices shift the aggregate supply curve to
AS
₀. If the government decides to counter the effects of lower oil prices by decreasing net taxes, then the price level will be ________ than
P
₀ and output will be ________ than
Y
₀.

◦ greater; greater
◦ greater; less
◦ less; less
◦ less; greater

Question 2

Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.

Refer to Figure 27.3. Assume the economy is currently at Point
A on aggregate supply curve
AS
₁. A decrease in inflationary expectations that causes firms to decrease their prices

◦ shifts the aggregate supply curve to
AS
₀.
◦ shifts the aggregate supply curve to
AS
₂.
◦ moves the economy to Point
C on aggregate supply curve
AS
₁.
◦ moves the economy to Point
B on aggregate supply curve
AS
₁.

juwms · **Reply #1 on:** Apr 19, 2019

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