Exhibit 11-3 Aggregate Demand and Supply Model Beginning at Equilibrium

question 144

Multiple Choice

Exhibit 11-3 Aggregate demand and supply model Beginning at equilibrium E₁ in Exhibit 11-3, when the government increases spending or cuts taxes the economy will experience:

• A)an inflationary recession.
• B)stagflation.
• C)cost-push inflation.
• D)demand-pull inflation.

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