Exhibit 17-2 -According to Those Who Favor an Active Approach to Policy

question 153

Multiple Choice

Exhibit 17-2
-According to those who favor an active approach to policy, how can the economy shown in Exhibit 17-2 attain equilibrium at potential output?

• A)The SRAS curve will shift to the left.
• B)The SRAS curve will shift to the right.
• C)Either the money supply or government spending should be increased.
• D)Either the Fed or the government will act to decrease aggregate demand.
• E)Aggregate demand should be increased.