10 2 3 40 50 6 70 8 96 10 11 126 QUESTION 19 A A Exhibit: Supply-Side Economics Paste Font Paragraph Styles Editing Dictate Editor Clipboard Styles Is Voice Editor Price level LRAS, LRAS2 SRASI 21. An increase in government transfer payments will shift the aggregate demand curve to the right " by the initial change in consumption arising from the change in transfer SRAS2 payment x the spending multiplier. P2 " by the initial change in income arising from the change in transfer payment x the spending P, AD2 multiplier. "by the change in transfer payments x times the spending multiplier. ADI "by the change in transfer payments x times the marginal propensity to consume. Y 1 YP1 YA Real GDP per year Page 12 of 12 2364 words X Focus + 100% If the economy's long-run aggregate supply curve is LRASy, then at price level P 1 and real GDP level Y p1. there is an inflationary gap. an opportunity to use discretionary fiscal or monetary policy to improve the economy. no gap, but the economy is not at its natural level of employment. O no gap, and the economy is at its natural level of employment Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All Answers Save and Submit