Question: Two graphs measure GDP over time. Each graph has horizontal line marked Full employment, and a solid GDP curve which reaches a peak at Year
Two graphs measure GDP over time. Each graph has horizontal line marked Full employment, and a solid GDP curve which reaches a peak at Year 1 and a trough at Year 2. In Graph A, a dotted GDP curve reaches a peak at Year 1 but at a lower amount than the solid line, and reaches a trough at Year 2 but at a higher amount than the solid line. In Graph B, a dotted GDP curve reaches a peak at Year 1 but at a higher amount than the solid line, and reaches a trough at Year 2 but at a lower amount than the solid line. According to the graph, if the solid line represents the GDP without policy and the dotted line includes policy, which side shows an ill-timed stabilization policy? Answer Unselected A Unselected Both A and B Unselected B
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