Figure 18-2 -Refer to Figure 18-2.In the Dynamic Model of AD-AS in of AD-AS

question 26

Multiple Choice

Figure 18-2
-Refer to Figure 18-2.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 pursue

• A)expansionary fiscal policy.
• B)contractionary fiscal policy.
• C)expansionary monetary policy.
• D)contractionary monetary policy.
• E)contractionary automatic stabilizers.

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Definitions:

Capital-Using Technologies

Innovations that increase the efficiency of capital usage, often leading to higher productivity but possibly requiring more initial investment.

Capital-Saving Technologies

Innovations that allow for the same level of production using fewer inputs of capital, usually leading to cost savings and increased efficiency.

Demographic Transition

describes the transformation of a country’s population structure as it progresses from high birth and death rates to low birth and death rates, often as part of economic development.