macro economics

Question 3 4) Refer to the belowfigure. Which tools should the government use to move the economy from Its current pop toward the potential GOP? * 1) Using fiscal policy; to Increase real GDP and employment the government could FOV- crnment expenditure on goods and services or taxes " al Increase; Increase bi Increase; decrease c Decrease; Increase ci Decrease; decrease The 21 Suppose that only revenue taken by the government is in the form of income tax, and the rate is 5 percent. If aggregate income is $800 billion, and government outlays are $100 billion then the government budget has * A deficit of $60 billion 61 A surplus of $60 billion cl A deficit of $40 billion of Increase the money supply, decrease the interest rate () A surplus of $40 billion b) Increase government expenditure; decrease taxes 3) Refer to the below figure. What would be the effect of the fiscal policy used by the pow- c) Decrease government expenditure, increase taxes ernment on aggregate demand curve and short run aggregate supply curve? " d) Decrease the money supply, increase the interest rate 5) Refer to the below figure. Which fiscal policy should the government undertake to re- move the economic cap? * The al AD shifts right, GRAS shifts right 6) AD shifts right, GRAS stays unchanged cl AD shifts left, SRAS shifts right al Expansionary monetary policy d) AD shifts left, SRAS stays unchanged bj Contractionary monetary policy cl Contractionary fiscal policy d) Expansionary fiscal policy