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Author Question: Refer to Figure 16-5. In the dynamic model ofAD-ASin the figure above, if the economy is ... (Read 48 times)

beccaep

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Question 1

Figure 16-5











Refer to Figure 16-5.  In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely


◦ decrease government spending.
◦ increase government spending.
◦ increase oil prices.
◦ increase taxes.
◦ lower interest rates.

Question 2

Figure 16-5











Refer to Figure 16-5.  In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B


◦ the unemployment rate is very low.
◦ firms are operating below capacity.
◦ the economy is above full employment.
◦ income and profits are rising.
◦ there is pressure on wages and prices to rise.


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Marked as best answer by beccaep on Mar 16, 2019

Jmfn03

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