Ov W X O Z 10. (03.05 MC) Use the graph to answer the question...

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Ov W X ΟΥ O Z 10. (03.05 MC) Use the graph to answer the question that follows. Price level X LRAS Y W AD1 Z SRAS AD2 AD3 Real GDP At which point on the graph is the economy producing output in equilibrium at its maximum sustainable potential? (2 points) Σ O O O 15. (03.07 MC) Suppose an economy is experiencing a positive demand shock. What will happen in the long run if the government doesn't intervene? (2 points) wages decrease; AD decrease; output decrease; unemployment decrease wages increase; AD increase; output increase; unemployment increase O wages increase; AS decrease; output decrease; return to full employment O wages decrease; AS increase; output increase; return to full employment O wages increase; AS decrease; output increase; unemployment increase □ 18. (03.08 LC) Which of the following accurately describes a limitation of fiscal policy? (2 points) The spending multiplier will always be more effective than the tax multiplier because of savings. The government can have no direct impact on aggregate demand in the economy. The government can influence the price level but not real output or aggregate demand. O The government has the ability to slow inflation but not close a recessionary gap. There is always a time lag to discretionary fiscal policy between action and impact. 19. (03.09 LC) Which one of the following is true for transfer payments as a type of automatic stabilizer? (2 points) Transfer payments require regular fiscal policy action to be effective. Transfer payments increase during times of economic expansion. Transfer payments are a type of discretionary fiscal policy. O Transfer payments decrease during times of economic expansion. Transfer payments decrease during the time of economic downturn. □ 1. (03.01 MC) Use the graph to answer the question that follows. Price level P1 P2 Decrease in input prices Increase in household spending Decrease in price level Y2 Increase in private investment Y1 AS AD1 AD2 Which of the following changes could explain the reason for the shift in output from Y1 to Y2? (2 points) Increase in income tax rates Output Ov W X ΟΥ O Z 10. (03.05 MC) Use the graph to answer the question that follows. Price level X LRAS Y W AD1 Z SRAS AD2 AD3 Real GDP At which point on the graph is the economy producing output in equilibrium at its maximum sustainable potential? (2 points) Σ O O O 15. (03.07 MC) Suppose an economy is experiencing a positive demand shock. What will happen in the long run if the government doesn't intervene? (2 points) wages decrease; AD decrease; output decrease; unemployment decrease wages increase; AD increase; output increase; unemployment increase O wages increase; AS decrease; output decrease; return to full employment O wages decrease; AS increase; output increase; return to full employment O wages increase; AS decrease; output increase; unemployment increase □ 18. (03.08 LC) Which of the following accurately describes a limitation of fiscal policy? (2 points) The spending multiplier will always be more effective than the tax multiplier because of savings. The government can have no direct impact on aggregate demand in the economy. The government can influence the price level but not real output or aggregate demand. O The government has the ability to slow inflation but not close a recessionary gap. There is always a time lag to discretionary fiscal policy between action and impact. 19. (03.09 LC) Which one of the following is true for transfer payments as a type of automatic stabilizer? (2 points) Transfer payments require regular fiscal policy action to be effective. Transfer payments increase during times of economic expansion. Transfer payments are a type of discretionary fiscal policy. O Transfer payments decrease during times of economic expansion. Transfer payments decrease during the time of economic downturn. □ 1. (03.01 MC) Use the graph to answer the question that follows. Price level P1 P2 Decrease in input prices Increase in household spending Decrease in price level Y2 Increase in private investment Y1 AS AD1 AD2 Which of the following changes could explain the reason for the shift in output from Y1 to Y2? (2 points) Increase in income tax rates Output

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Question 1 10 0305 MC According to the graph the economy is producing output in equilibrium at its m... View the full answer