Exhibit 11-6 Aggregate demand and supply model Price level AD Real GDP AS AD 2 AD...

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Exhibit 11-6 Aggregate demand and supply model Price level AD₁ Real GDP AS AD 2 AD 3 In Exhibit 11-6, if the aggregate demand curve is at AD3, the government should: Real GDP In Exhibit 11-6, if the aggregate demand curve is at AD3, the government should: a. raise taxes to move to AD 1. O b. cut taxes to move to AD1. O c. cut taxes to move to AD2. O d. cut spending to move to AD2. e. not change its behavior. Exhibit 11-6 Aggregate demand and supply model Price level AD₁ Real GDP AS AD 2 AD 3 In Exhibit 11-6, if the aggregate demand curve is at AD3, the government should: Real GDP In Exhibit 11-6, if the aggregate demand curve is at AD3, the government should: a. raise taxes to move to AD 1. O b. cut taxes to move to AD1. O c. cut taxes to move to AD2. O d. cut spending to move to AD2. e. not change its behavior.

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