Use the Following to Answer Questions

question 7

Multiple Choice

Use the following to answer questions .
Exhibit: Fiscal Policy 2
-(Exhibit: Fiscal Policy 2) Assume that the economy is initially at Y_r. A nonintervention policy
Would return the economy to its potential output by

• A) allowing the short-run aggregate supply to shift to the right.
• B) allowing the short-run aggregate supply to shift to the left.
• C) allowing the aggregate demand to shift to the left.
• D) allowing the aggregate demand to shift to the right.

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Definitions:

Carbon Monoxide Detector

A device that detects the presence of the carbon monoxide gas to prevent carbon monoxide poisoning.

Chimney Inspector

A professional tasked with examining the structural integrity and ensuring the safe operation of chimneys.

Heater

A device used to generate heat for the purpose of increasing temperature in an enclosed space.

Crosswalk

A designated part of a road marked for pedestrian crossing, intended to ensure the safety of people crossing the street.