Answer Happy

Options for second image:
The (inflationary/recessionary gap)
unemployment (above/below)
7. Effects of an active or passive policy The following graph shows the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), and the long-run aggregate supply curve (LRAS) for a hypothetical economy. (?) 360 LRAS SRAS 300 240 180 120 AD 60 PRICE LEVEL
PRICE LEVEL 360 300 240 180 120 8 60 LRAS SRAS AD 8 12 16 REAL GDP (Trillions of dollars) 20 24
of $4 trillion drives unemployment the unemployment rate Suppose the economy is in short-run equilibrium. The consistent with full-employment output. Suppose public officials are concerned about the $4 trillion gap in the economy and the resulting higher-than-expected aggregate demand. The government has decided to follow a passive approach to policymaking. On the following graph, shift the AD curve, the SRAS curve, or both to show the intended effect of this approach. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move the curve and it snaps back to its original position, just try again and drag it a little farther. (? 360 SRAS O
Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move the curve and it snaps back to its original position, just try again and drag it a little farther. ? 360 SRAS 300 240 180 120 AD 60 PRICE LEVEL O T 1 I I 25 12 16 20 24 AD SRAS
PRIC 120 60 8 0 AD 0 8 12 16 24 REAL GDP (Trillions of dollars) Which of the following policies would advocates of an active approach choose to close the gap found on the initial graph? Check all that apply. A decrease in the reserve requirement set by the Federal Reserve A decrease in the money supply A decrease in government spending An increase in taxes 4 20