Figure 18-5
-Refer to Figure 18-5.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
A) the unemployment rate is very low.
B) firms are operating below capacity.
C) the economy is above full employment.
D) income and profits are rising.
E) there is pressure on wages and prices to rise.
Correct Answer:
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Q82: Figure 18-6 Q82: An increase in government spending increases the Q84: Which of the following would be most Q87: The problem typically during a recession is Q90: How does expansionary monetary policy increase spending Q93: Contractionary fiscal policy involves decreasing government purchases
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