The Diagram Below Shows an AD/AS Model for a Hypothetical

question 42

Multiple Choice

The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. FIGURE 24-7 Refer to Figure 24-7.The government could close the existing output gap by

• A)increasing the net tax rate.
• B)decreasing the net tax rate.
• C)increasing government purchases.
• D)decreasing government transfer payments.
• E)implementing an expansionary fiscal policy.

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Definitions:

Consumer Behaviour

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.

Point of Purchase

The location or moment at which a transaction occurs, often referring to retail environments where purchasing decisions are made.

Exchange Process

The act of giving one thing and receiving another in return, often used in the context of business transactions or trade.

Consumer Behaviour

Refers to the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants.