bunutg at are lh à difficult financial position D) auditing the various agencies

Question

bunutg at are lh à difficult financial position D) auditing the various agencies and departments of the federal government 27) The level of output determined by the intersection of the short-run aggregate supply curve and the aggregate demand curve A) is always below full-employment output. B) is always above full-employment output C) always corresponds to full-employment output. D) may be above, below, or equal to full-employment output 28) Which of the following is an example of a contractionary fiscal policy? A) the Fed buying government securities in the open market B) the federal government decreasing the marginal tax rate on incomes below $200,000 C) the federal government decreasing the amount of money spent on public health programs D) the federal government reducing pollution standards to allow firms to produce more output 29) The aggregate demand curve would shift to the right if A) government spending were decreased. B) net taxes were decreased. C) the money supply were decreased. D) the cost of energy were to increase. a change in net taxes on aggregate 30) If the long-run aggregate supply curve is vertical, the output in the long run is zero

Explanation / Answer

Ans27) D is the correct option. May be above, below or equal to full employment output. Full employment is determined by the long run aggregate supply curve. In the short run the output may deviate from full employment level

Ans 28) C is the correct option. The federal government decreasing the amount of money spent on public health programs. The government spending is reduced, Contractionary fiscal policy is when the government either cuts spending or raises taxes.

Ans29) B is the correct option. Net taxes were decreased. When the taxes were decreased, the component of aggregate demand that is consumption will increase which will shift the aggregate demand curve to the right and the aggregate demand will increase

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