Question :
Refer to the information provided in Figure 13.2 below to : 1381187
Refer to the information provided in Figure 13.2 below to answer the questions that follow.
Figure 13.2
21) Refer to Figure 13.2. An expansionary fiscal policy would be most effective in raising output with little or no inflation when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) AD1 to AD6.
22) Refer to Figure 13.2. The output multiplier is largest when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) The output multiplier is the same for all AD curve shifts shown in the figure.
23) Refer to Figure 13.2. The tax multiplier is smallest (in absolute value) when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) The output multiplier is the same for all AD curve shifts shown in the figure.
24) Refer to Figure 13.2. Firms respond to an increase in government spending by mostly raising their prices when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) AD6 to AD1.
25) Refer to Figure 13.2. Firms respond to a decrease in net taxes by mostly increasing output when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) AD6 to AD1.
26) Refer to Figure 13.2. In response to an increase in government spending, the Fed would increase the interest rate by the greatest amount when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) AD6 to AD1.
27) Refer to Figure 13.2. In response to a decrease in net taxes, the Fed would increase the interest rate by the least amount when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) AD1 to AD6.
28) Refer to Figure 13.2. Planned investment would experience the greatest amount of crowding out when the aggregate demand curve shifts from
A) AD1 to AD2.
B) AD3 to AD4.
C) AD5 to AD6.
D) The amount of crowding out is the same for all AD curve shifts shown in the figure.
29) If wages adjust fully to price increases in the long run, fiscal policy will
A) have no affect on the price level.
B) have no affect on output.
C) have no affect on either output or the price level.
D) affect both output and the price level.
30) Economic policies are ineffective concerning quantities of output directly when
A) the aggregate supply curve is flat.
B) the aggregate demand is flat.
C) the aggregate supply is vertical.
D) the economy is not producing at capacity.
31) Economic policies are effective at changing output when
A) the economy is not producing at capacity.
B) the economy is producing at its potential output.
C) the unemployment rate is at the natural rate.
D) the aggregate supply curve is vertical.
32) If the long-run aggregate supply curve is vertical, the multiplier effect of a change in net taxes on aggregate output in the long run
A) depends on the price level.
B) is one.
C) is zero.
D) is infinitely large.
