Expansionary Fiscal Policy - Graphically Exercise 4 points The gr.docx - Expansionary Fiscal Policy Graphically Exercise 4 points The graph below

Expansionary Fiscal Policy - Graphically Exercise 4 points The gr.docx

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Expansionary Fiscal Policy - Graphically Exercise 4 points The graph below depicts an economy where a decline in aggregate demand has caused a recession. This economy's current level of real GDP (Y1) is below its long-run equilibrium, which is illustrated by the long-run aggregate supply curve (LRAS), and a price level below the equilibrium value of Pe. eBook a. Suppose that government officials have decided to implement expansionary fiscal policies. What are their desired outcomes? Print References Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click again to empty the box for the incorrect answers. Increase aggregate supply 2 Increase aggregate demand 2 Expand real GDP 2 Raise the price level 2 Reduce unemployment 2 Control inflation b. Which of the
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Unformatted text preview: following policy is consistent with expansionary fiscal policy? Increase sales tax rates. b. Which of the following policy is consistent with expansionary fiscal policy? points Increase sales tax rates. Book Reduce personal income tax rates. Print References Reduce spending on government infrastructure. Increase the amount of currency in circulation c. When comparing the two options for restoring the economy to its full-employment level of output, the benefit of allowing the economy to return to full employment on its own is that O full employment is reached with a lower price level. the economy will recover faster without fiscal policy lower unemployment and higher real GDP are reached. full employment is reached with a higher price level. < Prev B of 15 !!! Next >...
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  • Winter '19
  • Richard Levi

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