11:55 1 4G N Q4. The diagrams below show aggregate demand (AD) and short-run aggregate supply (SRAS) curves for the UK. All other things being equal, which one of the diagrams, A, B, C or D, shows the most likely effects of an increase in government spending financed by an increase in indirec tax? Price level SRAS? SRAS, Real national output Price SRAS, X SRAS2 Real national output Price BRAS, level C X SPAS, AD AD2 Real national output Price SRAS, level SRAS Real national output Q5. Which one of the following macroeconomic policies is a Keynesian economist most likely to recommend as a means of stimulating recovery for an economy that has been in recession for several years? A Increasing taxes to finance increased government expenditure. B Increasing the money supply to maintain very low interest rates. C Increasing government expenditure financed by increased government borrowing. D Cutting government expenditure to balance its budget. [1 mark]