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

question 139

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 12-1

-Refer to Figure 12-2.If an economy is operating in the short run at point a,Keynesian analysis indicates that expansionary fiscal policy will

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

Examine the reasons behind income inequality and its implications on national prosperity.

Understand the distinction between power and authority and the importance of moral consent.

Understand the common myths and realities of poverty.

Comprehend the causes and implications of income inequality.

---

Definitions:

Heckscher-Ohlin Theorem

An economic theory stating that countries export what they can most efficiently and plentifully produce, based on their factor endowments of labor, land, and capital.

Trade Flows

The movement of goods and services between countries or regions, highlighting the patterns and volumes of trade.

Factor Endowments

The quantity and quality of labor, land, and capital that a country possesses, which can affect its comparative advantage in trade.

Import Quota

A government-imposed limit on the quantity of a specific type of good that can be imported into a country.