On an Aggregate Supply and Aggregate Demand Graph, If the Short-Run

question 17

Multiple Choice

On an aggregate supply and aggregate demand graph, if the short-run equilibrium is below full employment, which of the following fiscal policies could be used to move the economy to full employment?

• A) Decrease government spending to shift the short-run aggregate supply curve to the right.
• B) Increase government spending to shift the short-run aggregate supply curve to the left.
• C) Increase taxes to shift the aggregate demand curve to the left.
• D) Decrease taxes to shift the aggregate demand curve to the right.

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Definitions:

Free Will

Free will is the concept that individuals have the ability to make choices that are not determined by past events, genetic makeup, or current environmental factors.

Cognitive Psychology

The branch of psychology that studies mental processes including perception, thinking, memory, and problem-solving.

Evolutionary Psychologists

Scientists who study the psychological adaptations of humans to the changing physical and social environment, often focusing on survival, reproduction, and behaviors that have evolved over time.

Behavioural Processes

The mechanisms underlying observable actions or reactions of living organisms, often studied in psychology and neuroscience.