Price Level 1200 1100 1000 900 800 700 600 500 400 200 200 100 AD Price Level SRAS O LRAS 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Real GDP 1.What type of the GDP gap is observed in the US (select one)?? a There is no recessionary or inflationary gap. b. The economy is facing an inflationary gap. C. The Economy is facing a recessionary gap. 2. The graph below shows the AD-AS diagram for the US. 1200 1100 AD 1000 900 noo 400 SRAS 300 200 100 LRAS 100 200 300 400 500 600 700 800 900 1000 1100 1300 Real GDP What type of fiscal policy should the government of the US be implementing to bring the economy to the long-run equilibrium (select one)?? a b. There is no need for either contractionary or expansionary fiscal policy. The government should implement contractionary fiscal policy. The government should implement expansionary fiscal policy. C.
1200 1100 AD 1000 900 ADO 700 MO 500 400 SRAS 300 200 100 LRAS 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 Real GDP 6. Based on the graph above, what should happen to the AD curve- MAKE SURE TO SHOW YOUR ANSQWER BY SHIFTING THE AD CURVE IN THE DIRECTION YOU THINK IT NEEDS TO GO Price Level
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