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. contractionary fiscal policy in an effort to move aggregate demand to the left.
B. contractionary fiscal policy in an effort to move aggregate demand to the right.
C. expansionary fiscal policy in an effort to move aggregate demand to the right.
D. expansionary fiscal policy in an effort to move aggregate demand to the left.
Answer: C
You might also like to view...
If, in a competitive market, marginal benefit is greater than marginal cost
A) the quantity sold is less than the equilibrium quantity. B) the net benefit to consumers from participating in the market is greater than the net benefit to producers. C) the government must force producers to lower price in order to achieve economic efficiency. D) the quantity sold is greater than the equilibrium quantity.
A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500 . What should the company do?
a. Fire the employees and save $1500 on rent b. Not fire the employees keeping them generates a profit of $1100 per employee c. Not fire the employees since keeping them generates a profit of $1085 per employee d. None of the above