Figure 16-1
-Refer to Figure 16-1.Suppose the economy is in a recession and expansionary fiscal policy is pursued.Using the static AD-AS model in the figure above,this would be depicted as a movement from

Question

Figure 16-1 
-Refer to Figure 16-1.Suppose the economy is in a recession and expansionary fiscal policy is pursued.Using the static AD-AS model in the figure above,this would be depicted as a movement from

Quizplus · Accepted Answer

Expansionary fiscal policy increases aggregate demand, shifting the AD curve to the right. This would move the economy from point A to point B.

Figure 16-1 -Refer to Figure 16-1.Suppose the Economy Is in a Recession