Exhibit 15-3 Aggregate Demand and Supply Model

question 25

Multiple Choice

Exhibit 15-3 Aggregate demand and supply model

-Beginning at equilibrium E₁ in Exhibit 15-3,when the government increases spending or cuts taxes the economy will experience:

• A) an inflationary recession.
• B) stagflation.
• C) cost-push inflation.
• D) demand-pull inflation.

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Definitions:

Liable

Being legally responsible or accountable, often in the context of owing compensation for harm or damage caused.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash or additional shares.

Illegal Distribution

The unauthorized distribution of materials or products, violating legal or regulatory standards.

Corporation's Assets

Resources or items of value owned by a corporation, including tangible and intangible properties.