Figure adas model ii reference figure adas model ii

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242. Figure: AD–ASModel IIReference: Ref 27-14(Figure: AD–ASModel II) If the value of household wealth increases, which of the following willtake place?A.SRAS curve will shift to the left.B.SRAS curve will shift to the right.C.AD curve will shift to the right.D.AD curve will shift to the left.Answer:C243. Figure: AD–ASModel II
Reference: Ref 27-14(Figure: AD–ASModel II) If there is a significant increase in government spending, which of thefollowing will take place in the short run?A.SRAS curve will shift to the left.B.SRAS curve will shift to the right.C.AD curve will shift to the left.D.AD curve will shift to the right.Answer:D244. Figure: AD–ASModel IIReference: Ref 27-14(Figure: AD–ASModel II) If the central bank reduces the quantity of money that is circulating inthe economy, then which of the following will take place?
A.LRAS will shift to the right.B.LRAS will shift to the left.C.AD curve will shift to the left.D.AD curve will shift to the right.Answer:C245. Figure: AD–ASReference: Ref 27-15(Figure: AD–AS) Suppose the economy is in an inflationary gap where SRAS1 intersects AD2. Thesize of the gap is equal toA.Y1-YP.B.Y1.C.Y1-Y2.D.YP-Y2.Answer:A246. Figure: AD–AS
Reference: Ref 27-15(Figure: AD–AS) Suppose that initially the economy is at long-run equilibrium. If the governmentcuts taxes, ________.A.SRASwill shift to the rightB.SRASwill shift to the leftC.ADwill shift to the rightD.ADwill shift to the leftAnswer:C247. Figure: AD–ASReference: Ref 27-15(Figure: AD–AS) Assume that the economy is in long-run equilibrium. If the Federal Reservelowers the key interest rate, _______.A.the aggregate demand curve will shift to AD2B.the aggregate demand curve will stay unchanged at AD1C.there will be a downward movement along the aggregate demand curve AD1D.the aggregate demand curve will shift to AD3Answer:A248. Figure: Policy Alternatives
Reference: Ref 27-16(Figure: Policy Alternatives) In panel (b), the economy is initially in short-run equilibrium at realGDP level Y1and price level P2. If the government decides to intervene, it would most likely:A.increase taxes.B.decrease the quantity of money available.C.increase the level of government purchases of goods and services.D.decrease the level of government purchases of goods and services.Answer:C249. Figure: Policy AlternativesReference: Ref 27-16(Figure: Policy Alternatives) If the economy is in equilibrium at Y1in panel (a), it is experiencingA.a recessionary gapB.an inflationary gap.C.simultaneous short-run and long-run equilibrium.D.full employment.Answer:A250. Figure: Policy Alternatives
Reference: Ref 27-16(Figure: Policy Alternatives) If the economy is in equilibrium at Y1in panel (a), it is experiencingA.full employment.B.an inflationary gap.C.a liquidity trap.D.stagflation.

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