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Figure: Effects of Policy Shifts
-(Figure: Effects of Policy Shifts)If the economy starts below full employment,an expansionary fiscal policy will move the aggregate demand curve from _____ to _____,and the equilibrium will move from _____ to _____.

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Figure: Effects of Policy Shifts 
-(Figure: Effects of Policy Shifts)If the economy starts below full employment,an expansionary fiscal policy will move the aggregate demand curve from _____ to _____,and the equilibrium will move from _____ to _____.

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When the economy is below full employment, an expansionary fiscal policy will shift the aggregate demand curve to the right (from AD₀ to AD₁), resulting in an increase in the equilibrium output and price levels (from point a to point b).

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