Exhibit 11-4
-Refer to the graph in the exhibit.What will happen in the economy if government purchases increase by the amount necessary to achieve full employment?
A) The AD curve will shift to the right, the SRAS curve will shift to the left, and long-run equilibrium will be achieved.
B) The AD curve will shift to the right, the price level will increase, and long-run equilibrium will be achieved.
C) The AD curve will shift to the right, the price level will increase, and the expansionary gap will worsen.
D) The AD curve will shift to the left, the price level will increase, and the contractionary gap will worsen.
Correct Answer:
Verified
Q59: Which of the following is a definitive
Q60: Which of the following describes the effects
Q61: Exhibit 11-3 Q62: Assume autonomous net taxes rise by $500, Q63: Which of the following might be considered Q65: Assume autonomous net taxes rise by $400,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents