Use the Figure Below to Answer the Following Question(s)

question 49

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 11-2

-Refer to Figure 11-2.If an economy operates in the short run at point a,Keynesian analysis indicates that restrictive fiscal policy will

• A)increase AD and move the economy toward point c.
• B)decrease AD and move the economy toward point b.
• C)increase SRAS and move the economy toward point b.
• D)decrease SRAS and move the economy toward point c.

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Definitions:

Alternative Given

A term used to describe a scenario or choice available apart from the primary option; however, without a specific economic or general established context, this phrase might be too broad or not specifically recognized as a distinct term.

Production Possibilities Frontier

A chart outlining the utmost production options for two commodities, considering a fixed amount of resources and additional elements.

Global Economy

The interconnected economies of the world's nations, influenced by global trade and investment.

Production Possibilities

Production possibilities depict the different combinations of goods and services that an economy can produce, given its available resources and technology, demonstrating the trade-offs and opportunity costs involved in production choices.