Question: According to the AD-AS model; a significant increase in individual income taxes wil have what effect on the economy? a. cyclical unemployment will decrease b.

According to the AD-AS model; a significant increase in individual income taxes wil have what effect on the economy? a. cyclical unemployment will decrease b. the economy will experience lower economic growth C. input prices will rise in the short run d. inflationary pressures will be greateRefer to Figure 11a. If the economy is at point Er, what would be the appropriate economic policy? An AD-AS diagram with three positions of the AD curve. Question 11 Answer a. Contractionary monetary policy to address deflation. b. Contractionary fiscal policy to bring output to the natural level. c. Expansionary fiscal policy to bring output to the natural level. d. Contractionary monetary policy to address inflation

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