ECON 211, Macroeconomics, February 2016 Joshua c Bare customer Support Sign out

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ECON 211, Macroeconomics, February 2016 Joshua c Bare customer Support Sign out aplia Personalized Reviews Discussion Course Materials Home Grades Fiscal Policy and the Federal Budget Graded Assignment I Read Chapter 11 l Back to Assignment Due Monday 04.04.16 at 08:15 AM Average: /1 Attempts: 4. Effects of fiscal policy Suppose the government decided to increase government purchases, but everything else in the economy remained the same. On the following graph, shift the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), or both to show the intended short-run effect of this fiscal policy on the economy. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. SRAS AD SRAS Suggestions AD Session 57:10 Timeout REAL GDP Grade It Now Save & Continue Suggestions Session Copyright Notices Terms of Use Privacy Notice Security Notice Accessibility 57:10 Timeout

Explanation / Answer

Here the equilibrium point will shift to the right,

Both the AD and As in short term will show good numbers. This will be the result of more government spending.

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