Consider the Basic AD/AS Model,and Suppose There Is a Negative

question 138

Multiple Choice

Consider the basic AD/AS model,and suppose there is a negative output gap.If an expansionary fiscal policy is pursued and the AS curve shifts leftward unexpectedly,the fiscal policy may be ________,and real GDP may ________ potential GDP.

• A)too weak; stay below
• B)too weak; rise above
• C)too strong; stay below
• D)too strong; rise above
• E)appropriate; equal

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Definitions:

Cost To Consumer

The total price that a consumer has to pay to acquire a product or service, including the cost of production and the markup by sellers.

Intermediary

A mediator or agent between two parties who facilitates interaction, negotiation, or transaction, often seen in financial services, trade, and distribution channels.

Ultimate Consumer

The end-user or actual buyer who uses or consumes a product or service for personal use, not for resale.

Broker

A person or firm that acts as an intermediary between buyers and sellers, usually for a fee or commission.