If the AS curve is upward-sloping,the government alone should raise its purchases by the amount of the AD shortfall in order to reach full-employment equilibrium.

Question

Quizplus · Accepted Answer

If the AS curve is upward-sloping, simply increasing government purchases may not be enough to reach full-employment equilibrium. Other factors such as changes in taxes, interest rates, or international trade may also need to be considered. Additionally, there may be limitations on how much the government can increase spending without causing inflation or other negative economic effects.

If the AS Curve Is Upward-Sloping,the Government Alone Should Raise