. L N Consumer Goods (a) (b) 0 Capital Goods Refer to the above production possibilities curves. Curve (a) is the current curve for the economy. Given production possibilities curve (a), point N suggests that the economy is: O attaining both full employment and full production. O using its available resources inefficiently. O attaining full employment but not full production. O attaining full production but not full employment.Supply $1.60 Price 1.00 .50 Demand 0 130 200 290 Quantity Refer to the above diagram. A shortage of 160 units would be encountered if price was: O $1.00. O $1.10, that is, $1.60 minus $.50. $1.60. O $.50.C A Capital Goods E 3 0 F B D Consumer Goods Refer to the above diagram. A shift in the production possibilities curve from AB to CD is most likely due to: O an increase in government purchase of the economy's output. O the use of the economy's resources in an efficient way. O an increase in the quantity and quality of labor resources. O an increase in the spending of business and consumers.AS, AS, AS3 Price Level es AD 0 Q2 Q1 Q3 Real Domestic Output Refer to the above diagram. When output increases from Q1 and the price level decreases from P1, this change will: O be caused by a shift in the aggregate supply curve from AS1 to A53. O be caused by a shift in the aggregate supply curve from AS1 to AS2. O result in a movement along the aggregate demand curve from e1 to e2. O result in a movement along the aggregate demand curve from e3 to e1.A5 Prion Level 3 an, an: a Real our Reler to the above diagram. The economy is at equilibrium at point A. What Fiscal policy would be most appropriate to control demand-pull inflation? iii Increase aggregate demand tn..- increasing government spending. C} Increase aggregate demand tn.- decreasing taxes. :1} Decrease aggregate supply by increasing taxes. C} Decrease aggregate demand by increasing taxes