Author Question: If wages adjust fully to price increases in the long run, fiscal policy will (Read 74 times)

Charlie · **on:** Apr 19, 2019

Question 1

Refer to the information provided in Figure 27.2 below to answer the question(s) that follow.

Refer to Figure 27.2. Planned investment would experience the least amount of crowding out when the aggregate demand curve shifts from

◦ AD
₁ to
AD
₂.
◦ AD
₃ to
AD
₄.
◦ AD
₅ to
AD
₆.
◦ The amount of crowding out is the same for all
AD curve shifts shown in the figure.

Question 2

If wages adjust fully to price increases in the long run, fiscal policy will

◦ have no affect on the price level.
◦ have no affect on output.
◦ have no affect on either output or the price level.
◦ affect both output and the price level.

asdfasdf · **Reply #1 on:** Apr 19, 2019

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