Exhibit 20A-2  Macro AD/AS Models in Panel (A) of Exhibit

question 117

Multiple Choice

Exhibit 20A-2  Macro AD/AS Models In Panel (a) of Exhibit 20A-2, the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂. If the federal government or Fed decides to intervene, it would most likely:

• A) increase taxes.
• B) decrease the money supply.
• C) increase the level of government spending for goods and services.
• D) decrease the level of government spending for goods and services.

---

Definitions:

Output Per Million BTUs

A measure of energy efficiency, indicating the amount of output produced for every million British Thermal Units consumed.

World Population

The total number of living humans on Earth at a given time.

Per Capita Energy

The average amount of energy consumed per person within a specific population or area.

Degree Celsius

A unit of measurement for temperature where 0 degrees represents the freezing point of water, and 100 degrees represents the boiling point at sea level.