Assuming the economy is represented by the graph shown, if the government were to enact an expansionary fiscal policy, it would be most likely to move from: Price Level LRAS SRAS PA........ D B P:- -. ADA A P. ADJ AD: AD: O equilibrium A to B. O equilibrium D to B. O equilibrium B to A. O equilibrium D to C.If the MPC is 0.5, and the government cuts spending by $400b, the overall effect on GDP will be: O an increase of $800b. O an increase of $400b. O a decrease of $400b. O a decrease of $800b.The inflation rate is: O the percentage change in the overall production level. O one of the central concepts in microeconomics. one of the central concepts in macroeconomics. OO a measure of the rate of increase in the rate of production.Many governments actively work to: O attract foreign direct investment. hoping itwill build up their capital stock when domestic savings aren't sufcient. O attract foreign direct investment. so that when foreign companies invest in local rms, they can transfer human capital to local managers. 0 discourage foreign direct investment, in an effort to avoid "crowding out" 0 discourage foreign direct investment, in an effort to encourage locals to invest in their own economy