Refer to the information provided in Figure 27.3 below to answer ...

[Metfan725]

Question 1

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





Refer to Figure 27.3. Cost-push inflation occurs if

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

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 at Point 
A. Higher oil prices shift the aggregate supply curve to 
AS
₂. If the government decides to counter the effects of higher oil prices by increasing government spending, then the price level will be ________ than 
P
₂ and output will be ________ than 
Y
₂.

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

[kardosa007]

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[Metfan725]

Thanks

[kardosa007]

Welcome