Figure 27-2 -Refer to Figure 27-2.In the Dynamic Model of AD-AS in Model

question 28

Multiple Choice

Figure 27-2

-Refer to Figure 27-2.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,Congress and the president would most likely

• A) decrease government spending.
• B) increase government spending.
• C) increase oil prices.
• D) increase taxes.
• E) lower interest rates.

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Definitions:

Public Policy

Guiding principles and philosophies that underlie the laws and actions of a government, aimed at ensuring the public's general welfare.

Unenforceable

A term applied to a contract that, because of a law, cannot be enforced by the courts.

Substantive Unconscionability

Unconscionability that derives from one-sided, unjust, or overly harsh substance in a contract.

Maximum Interest Rate

The highest rate of interest that can be charged on loans or credit, often regulated by law to prevent usury.