Use the Following to Answer Questions

question 81

Multiple Choice

Use the following to answer questions:
-(Figure: Short- and Long-Run Equilibrium) Refer to Figure: Short- and Long-Run Equilibrium. If the economy is at equilibrium at E₁, the government should use _____ fiscal policy to shift the aggregate demand curve to the _____.

• A) expansionary; right
• B) expansionary; left
• C) contractionary; right
• D) contractionary; left

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Definitions:

Purchase Obligations

Commitments made by a company to buy goods or services under specified terms in the future.

Product or Service Restrictions

refer to limitations or rules placed on the sale or provision of certain goods or services, often for safety, legal, or ethical reasons.

Franchise Contracts

Legal agreements granting someone the rights to operate a business under a franchisor's brand and business model.

Indefinitely

For an unspecified or unlimited period of time.