Use the following to answer questions:
Figure: Fiscal Policy I 
-(Figure: Fiscal Policy I) Look at the figure Fiscal Policy I. Suppose that this economy is in equilibrium at E1. If there is an increase in government purchases,_____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.
A) AD2; left; increase; decrease
B) AD2; left; decrease; decrease
C) AD1; right; increase; increase
D) AD1; right; decrease; increase
Correct Answer:
Verified
Q44: Contractionary fiscal policy includes:
A) increasing government purchases.
B)
Q45: A cut in taxes _, shifting the
Q46: An increase in government transfers is an
Q49: Use the following to answer questions:
Figure: Inflationary
Q49: To close a recessionary gap with fiscal
Q51: Use the following to answer questions:
Figure: Inflationary
Q53: Use the following to answer questions:
Figure: Inflationary
Q55: Use the following to answer questions:
Figure: Fiscal
Q57: Use the following to answer questions:
Figure: Short-
Q59: Use the following to answer questions:
Figure: Inflationary
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