Refer to the graph. The movement from point 1 to point 2 is stimulated by a disequilibrium in which there is domestic_ and OA. unemployment; trade deficit OB. overemployment; trade deficit OC. unemployment; trade surplus OD. overemployment; trade surplus O E. inflation; unemployment Exchange Rate, E EP/P |↓ N Xx²

Figure 12.4 LRAS2 LRAS, P2 AD AD2 Real GDP (billions of dollars) Refer to Figure 12.4. A movement from equilibrium point B to equilibrium point A would be the result of O an increase in productivity and an increase in government spending. O an increase in consumer confidence and decrease in productivity. an increase in production costs and greater consumer confidence. O technological advances and domestic price decreases. Price Level (dollars) P,

An increase in the real exchange rate ​(real depreciation of domestic currency​) will result​ in:    A. an increase in imports only.   B. an increase in net exports.   C. a decline in imports.   D. a decline in exports.

A4 Assume Morocco is currently operating with an unemployment rate six percent above its natural rate of unemployment. Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves. Label the equilibrium price level PL1 and the equilibrium real output Y1. Label the full-employment level of output YF. Where on a production possibilities curve representing full employment in Morocco would current output be—on, outside, or inside the PPC? What can be assumed about inflation based on the information above? Assume that the output gap is estimated to be $156 billion and the government decides to take action. If the marginal propensity to consume is 0.75, by how much would it need to change government spending to close the gap? Show your work. If instead, government chose to use the income tax to close the output gap rather than changes in spending, calculate the change in tax revenue the…