In Figure 9

question 6

Multiple Choice

In Figure 9.2,if the consumption function shifts from C₂ to C_1, autonomous consumption

• A)Increases,and aggregate demand shifts to the right.
• B)Decreases,and aggregate demand shifts to the right.
• C)Increases,and aggregate demand shifts to the left.
• D)Decreases,and aggregate demand shifts to the left.

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Definitions:

Trouble

A vague term that could refer to difficulties or problems but lacks specificity in an economic or defined key-term context.

Implementation Lag

The time between the identification of a need for a policy and the moment the policy takes effect.

Fiscal Policy

Governmental adjustment of its spending levels and tax rates to monitor and influence a nation's economy.

Monetary Policy

Monetary policy involves the management of a nation's money supply and interest rates by its central bank to influence economic activity, inflation, and unemployment.