Author Question: A decrease in aggregate expenditure has what result on equilibrium GDP? A) Equilibrium GDP falls. ... (Read 91 times)

sam.t96

  • Hero Member
  • *****
  • Posts: 570
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

  • Sr. Member
  • ****
  • Posts: 343
Answer to Question 1

A

Answer to Question 2

A



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

For a complete list of videos, visit our video library