Assuming the economy in the graph shown is currently at equilibrium A, if the government wanted to enact a policy it would likely enact:
A. expansionary fiscal policy in an effort to move aggregate demand to the right.
B. contractionary fiscal policy in an effort to move aggregate demand to the left.
C. expansionary fiscal policy in an effort to move aggregate demand to the left.
D. contractionary fiscal policy in an effort to move aggregate demand to the right.
A. expansionary fiscal policy in an effort to move aggregate demand to the right.
You might also like to view...
Consider the two economies of Lithasia and Barylia. Economic agents in Lithasia have coordination and incentive problems, while in Barylia social surplus is maximized
Which economic system does each of these economies most likely have? Explain your answer.
Which of the following pairs is the best example of substitutes?
a. coffee and cream b. videotapes and VCRs c. honey and biscuits d. bread and butter e. butter and margarine