QUESTION 4 1 points Save Answer When an economy is at a recessionary gap which of channel is likely to get the economy back to full employment? Do nothing. Decrease in government spending = increase in aggregate demand - increase in production - decrease in unemployment rate = economy back to full employment Increase in government spending = increase in aggregate demand - increase in production - decrease in unemployment rate = economy back to full employment Increase taxes - decrease in aggregate demand - increase in production - decrease in unemployment rate = economy back to full employmentQUESTION 2 1 points Save Answer Refer to figure 1. How much is the potential output or potential real GDP? Figure 1 LRAS GDP deflator C SRAS B A 100 AD3 AD2 AD1 8 10 Real GDP O 2. O 8. O 10. O - 2.QUESTION 5 1 points Save Answer On Friday, March 27 U.S. President signed the historic $2 trillion stimulus after Congress passes. Which of the following Decrease in taxes - increase in aggregate demand - increase in production - decrease in unemployment rate = economy back to full employment Decrease in government spending - increase in aggregate demand = increase in production - decrease in unemployment rate = economy back to full employment Increase in government spending - increase in aggregate demand = increase in production = decrease in unemployment rate = economy back to full employment O Increase taxes - decrease in aggregate demand - increase in production - decrease in unemployment rate = economy back to full employmentQUESTION 3 1 pain:- SanAmwor Refer to gure 1. Suppose the economy as of March 1 was producing potential output. Then beginning middle of March COV'ID 1Q panic hit the economy sliding it into a recession. Which equilibrium point would show the economy is in e recessionary state? How much is the recessionary gap? Figure 1 GDP deltor 0 Point A; reoessionary gap :2. 0 Point A; recessionary gap =8. 0 Point B; recessionary gap :10. 0 Point C: recessionary gap =-2. QUESTION 1 1 points Save Answer Refer to figure 1. Which point, A, B or C, represents full-employment equilibrium? (LRAS: long-run aggregate supply; SRAS: short-run aggregate supply; and, AD: aggregate demand;) Figure 1 LRAS GDP deflator C SRAS A 100 AD3 AD2 AD1 10 Real GDP Full-employment equilibrium is at point A at the intersection of SRAS and AD1. Full-employment equilibrium is at point B at the intersection of LRAS and AD2. Full-employment equilibrium is at point C at the intersection of SRAS and AD3. Full-employment equilibrium is at point C at the intersection of LRAS and AD3