Figure 12-3
-Refer to Figure 12-3. Suppose the aggregate demand curve is AD₁.All of the following events
Would more likely bring the economy back to the natural rate of unemployment except

Question

Figure 12-3 -Refer to Figure 12-3. Suppose the aggregate demand curve is AD₁.All of the following events Would more likely bring the economy back to the natural rate of unemployment except

Quizplus · Accepted Answer

A one-time surcharge on income tax liabilities would decrease disposable income and reduce consumption, leading to a decrease in aggregate demand and potentially prolonging the economy's deviation from the natural rate of unemployment. The other events, such as increased investment, bond purchases by the Fed, and a cut in withholding rates, would increase aggregate demand and potentially bring the economy back to the natural rate of unemployment.

Figure 12-3 -Refer to Figure 12-3. Suppose the Aggregate Demand Curve Is