Figure 5.1 FUCKLEVEL REAL OUTPUT (3 billions In figure 5.1, suppose this economy is in equilibrium at Point a and OF represents full employment output. Which of the following statements is true? Select one: OA. The economy is experiencing serious inflation problems OB. There is no GDP gap OC. Inventories are accumulating OD. There is presure for the price level to fall OE. All of the above Question 4 Not yet answered Points out of 1.00 P Flag question In figure 5.1, suppose this economy is in equilibrium at Point b and OF represents full employment output. Which of the following statements is true? Select one: OA. This economy has a GDP gap of $100 billion OB. This economy has a GDP gap of less than $100 billion OC. This economy has a GDP gap of more than $100 billion D. This economy does not have a GDP gap Question 5 Not yet answered Points out of 1.00 p Flag question In figure 5.1, which of the following could cause the aggregate demand curve to shift from ADO to AD1, ceteris paribus? Select one: A - An increase in consumer confidence OB. A decrease in interest rates OC. A decrease in government spending on the environment OD. An increase in exports Question 6 Not yet answered Points out of 1.00 P Flag question Based on the scenario depicted in figure 5.1, the reason the aggregate demand shortfall is larger than the size of the recessionary gap is: Select one: OA Increases in government must be paid for with tax increases, which reduce the size of the aggregate demand increase. OB. Fiscal policy involves a crowding-out effect, which reduces the size of the aggregate demand increase. OC. The multiplier effect is not constant, which me e not predictable. OD. The aggregate supply curve is upward-sloping, which means that some of the increase in aggregate dem and is channeled into price increases rather than into more output