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Refer to the Following Figure to Answer the Questions That

Question 74

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Refer to the following figure to answer the questions that follow.
Refer to the following figure to answer the questions that follow.    -Which of the following would be the theoretical outcome of contractionary fiscal policy in the following aggregate demand-aggregate supply model,where LRAS is long-run aggregate supply and SRAS is short-run aggregate supply? A)  The aggregate demand (AD)  curve would shift from AD₁ to AD₂. B)  The short-run aggregate supply (SRAS)  curve would shift from SRAS2 to SRAS1. C)  The SRAS curve would shift from SRAS1 to SRAS2. D)  The AD curve would shift from AD₁ to AD₂ at the same time that the SRAS curve would shift from SRAS1 to SRAS2. E)  The AD curve would shift from AD₂ to AD₁.
-Which of the following would be the theoretical outcome of contractionary fiscal policy in the following aggregate demand-aggregate supply model,where LRAS is long-run aggregate supply and SRAS is short-run aggregate supply?


A) The aggregate demand (AD) curve would shift from AD₁ to AD₂.
B) The short-run aggregate supply (SRAS) curve would shift from SRAS2 to SRAS1.
C) The SRAS curve would shift from SRAS1 to SRAS2.
D) The AD curve would shift from AD₁ to AD₂ at the same time that the SRAS curve would shift from SRAS1 to SRAS2.
E) The AD curve would shift from AD₂ to AD₁.

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