Exhibit 16-1 -According to Those Who Favor an Active Approach to Policy,how

question 38

Multiple Choice

Exhibit 16-1
-According to those who favor an active approach to policy,how can the economy shown in Exhibit 16-1 attain equilibrium at potential output?

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

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