Assume the slope of the AD curve is equal to 0.4 and government introduces a fiscal policy stimulus package of £42 billion. What is the effect on real GOP? Select one Oa Real GDP will decrease by E70 billion O Real GDP will increase by E105 billion OC Real GDP will remain the same Od. Real GoP will increase by E42 bilion O. Real GOP will increase by 70 biion

(Figure: Fiscal Policy Options) Use Figure: Fiscal Policy Options. If the aggregate demand curve is AD': Price level LRAS SRAS AD" AD

Figure 16-7 Price level P3 a P₂ P₁ 0 LRAS A increase taxes LRAS 8 с Y₂ Ya contractionary fiscal policy O increase government spending O decrease interest rates SRAS₁ AD₁ SRAS AD₂ Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP? Real GDP (trillions of dollars)

A decrease in government purchases of $6 billion leads to an initial $4.5 billion decrease in withdrawals. a. In this case MPW is, MPC is, and the spending multiplier in this economy is Enter your responses for marginal propensities and multiplier values rounded to 2 decimal places. b. With this change in government purchases the AD curve shifts to the by $billion. Enter your response for the size of the curve shift rounded to 1 decimal place. Do not put a minus sign in your answer. c. As a result of this shift the equilibrium price level will (Click to select) vv and equilibrium real output will C A decrease in government purchases of $6 billion leads to an initial $4.5 billion decrease in withdrawals. MPC is a. In this case MPW is , and the spending multiplier in this economy is propensities and multiplier values rounded to 2 decimal places. Enter your responses for marginal b. With this change in government purchases the AD curve shifts to the (Click to select) by $ of the curve…

QUESTION 7 Refer to the diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE3, the: AE, AE, AE, e of k GDP O recessionary expenditure gap is BC. O recessionary expenditure gap is ed. O recessionary expenditure gap is AB. inflationary expenditure gap is BC. O inflationary expenditure gap is ed. Aggregate Expenditures

There answer is not A

please anwer  ponit no:- 4, 3 and 2. (It will be nice if u answer all points)

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Why does a $1 increase in government purchases lead to more than a $1 increase in income and spending? OA. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to a decrease in induced spending OB. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to a decrease in induced spending OC. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to an increase in induced spending OD. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to an increase in induced spending

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