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Which of the Following Would Be the Theoretical Outcome of Contractionary

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Which of the following would be the theoretical outcome of contractionary fiscal policy in the following aggregate demand-aggregate supply model, where LRAS is long-run aggregate supply and SRAS is short-run aggregate supply?
Which of the following would be the theoretical outcome of contractionary fiscal policy in the following aggregate demand-aggregate supply model, where LRAS is long-run aggregate supply and SRAS is short-run aggregate supply?    A)  The aggregate demand (AD)  curve would shift from AD<sub>1</sub> to AD<sub>2</sub>. B)  The short-run aggregate supply (SRAS)  curve would shift from SRAS<sub>2</sub> to SRAS<sub>1</sub>. C)  The short-run aggregate supply (SRAS)  curve would shift from SRAS<sub>1</sub> to SRAS<sub>2</sub>. D)  The aggregate demand (AD)  curve would shift from AD<sub>1</sub> to AD<sub>2</sub> at the same time that the SRAS curve would shift from SRAS<sub>1</sub> to SRAS<sub>2</sub>. E)  The aggregate demand (AD)  curve would shift from AD<sub>2</sub> to AD<sub>1</sub>.


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Element of Culture

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Sapir-Whorf Hypothesis

A theory suggesting that the structure of a language shapes its speakers' worldview and cognitive processes, influencing their perception of reality.

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Conspicuous Consumption

The ostentatious display of goods to mark one’s social status.

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