The Figure Given Below Depicts the Macroeconomic Equilibrium in a Country

question 77

Multiple Choice

The figure given below depicts the macroeconomic equilibrium in a country. Figure 11.3 Refer to Figure 11.3.Assume that the increase in aggregate demand from AD₁ to AD₂ was the result of government spending that was financed by borrowing.Assuming that the Ricardian equivalence holds and people expect taxes to rise in future, the equilibrium income will be:

• A)$800.
• B)less than $500.
• C)more than $800.
• D)less than $700.
• E)$700.

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Definitions:

Disadvantaged People

Individuals or groups that face social, economic, or political barriers preventing them from accessing equal opportunities or resources compared to the wider society.

Politically Disadvantaged

Individuals or groups lacking influence or power within political systems, often due to economic status, race, or ideology.

Global Warming

Global warming refers to the long-term rise in Earth's average surface temperature due to human-made emissions of greenhouse gases.

Serious Climate Change

Significant alterations in global or regional climate patterns, typically linked to human activities like fossil fuel burning.