Figure 16-5 -Refer to Figure 16-5.In the Dynamic Model of AD-AS in of AD-AS

question 100

Multiple Choice

Figure 16-5
-Refer to Figure 16-5.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:

Price Reduction

A decrease in the price of goods or services, often used as a strategy to increase sales or market share.

Maintenance, Repair

Activities and processes aimed at keeping equipment or facilities in working order and restoring them to operational condition after damage or wear.

Operating Supplies

Items that are consumed during the day-to-day operations of a business, including stationery, cleaning products, and small tools.

Competitive Price

The pricing of goods or services in a manner that is attractive to consumers while remaining sustainable for the business, often used to gain an advantage in the market.