Remaining Time: 35 minutes, 37 seconds. s Question Completion Status: O shift th
ID: 1102872 • Letter: R
Question
Remaining Time: 35 minutes, 37 seconds. s Question Completion Status: O shift the aggregate demand curve and the short-run aggregate supply curve to the right until long-run equilibrium is restored at a price level QUESTION 20 Figure 12-3 Price level LRAS AD2 AD. AD per year pursue? O increase government spending, O increase government spending, i O increase government spending O maintain existing government spending individual income tax rates, and corporate income tax rates demand curve is ADo, which of the following is the most appropriate discretionary fiscal policy to increase individual income tax rates, and increase corporate income tax rates ncrease individual income tax rates, and decrease corporate income tax rates decrease individual income tax rates, and decrease corporate income tax rates QUESTION 21 9 points A change in government purchases shifts the aggregate consumption x marginal propensity to consume O change in consumption x marginal propensity to consume. demand curve by an amount equal to the A) change in change in government purchases x money multiplier. O change in government purchases x spending mutiplier change in the spending multiplier x change in government purchases. QUESTION 22 9 points Click Sove and Submit to sove and submit Cick Save Al Answers to sove oll answersExplanation / Answer
20. The economy at AD0 is already in long run equilibrium. Under discretionary fiscal policy changes are made under exceptional circumstances. Since the economy is already at equilibrium no changes are needed. The correct answer is D.
21. The correct answer is C. Aggregate demand thus shifts by the change in government purchases*spending multiplier. The correct answer is C.