Exhibit 20A-2 Macro AD/AS Models

question 111

Multiple Choice

Exhibit 20A-2 Macro AD/AS Models

In Panel (b) 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) decrease taxes.
• B) increase 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:

National Labor Relations Act

A foundational statute in United States labor law that protects the rights of employees to organize and to bargain collectively with their employers.

Private-Sector Employees

Individuals who work for businesses or organizations that are not part of the government.

Immigration Reform and Control Act

A U.S. federal law enacted in 1986 aimed at addressing illegal immigration, including provisions for sanctions against employers who hire illegal immigrants and legalizing certain immigrants.

Invasion of Privacy

An intrusion upon the personal life of another, without just cause, which can give the person whose privacy has been invaded a right to bring a lawsuit for damages against the person or entity that intruded.