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

question 37

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:

Non-Metallic

Refers to elements or materials that do not exhibit the characteristics of metals, such as electrical conductivity or luster.

Mineral Resource

Natural deposits of minerals within the Earth’s crust that are of economic value and can be extracted and processed.

Soil

The top layer of the Earth's surface consisting of mineral particles, organic matter, water, and air, serving as the primary medium for plant growth and nutrient cycling.

Sand

Fine particles of rock and mineral, typically found on beaches and desert landscapes, often used in construction and manufacturing.