Home / Questions / Refer to graph 2. If the economy is in long run equilibrium and aggregate demand (AD) curv...
Refer to graph 2. If the economy is in long run equilibrium and aggregate demand (AD) curve increases. What would be the effect of the fiscal policy undertaken by the government on aggregate demand curve and on the short run aggregate supply curve? *
AD shifts right, SRAS shifts right
AD shifts right, SRAS stays unchanged
AD shifts left, SRAS shifts right
AD shifts left, SRAS stays unchanged
2-Refer to graph 2. If the economy is in long run equilibrium and aggregate demand (AD) curve increases.What would be the effect of the fiscal policy used by the government on the output level, price level and unemployment rate? *
RGDP decreases, price level decreases and unemployment rate increases
RGDP decreases, price level increases and unemployment rate decreases
RGDP increases, price level increases and unemployment rate decreases
RGDP increases, price level decreases and unemployment rate decreases
3-A fiscal policy *
Is performed by the central bank
Effective in the short run
Depends on the interest rate in the market
None of the above
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