Figure 16-7

-Refer to Figure 16-7.If the economy is at point 4, boosting aggregate demand through Expansionary policies will most likely lead to

Question

Figure 16-7
 
-Refer to Figure 16-7.If the economy is at point 4, boosting aggregate demand through Expansionary policies will most likely lead to

Quizplus · Accepted Answer

Point 4 is in the contraction phase, which is characterized by low output and high unemployment. Boosting aggregate demand through expansionary policies would likely lead to a shift to the right in the aggregate demand curve, moving the economy towards point 3 in the recovery phase with higher output and lower unemployment.

Figure 16-7 -Refer to Figure 16-7.If the Economy Is at Point 4