Suppose that the government engages in expansionary fiscal policy by increasing government spending. Show the initial impact by properly shifting the aggregate demand curve (AD),
Suppose that the government engages in expansionary fiscal policy by increasing government spending. Show the initial impact by properly shifting the aggregate demand curve (AD), the short-run aggregate supply curve (SRAS), or the long-run aggregate supply curve on the graph below. LRAS SRAS Aggregate price level (P) AD Appregate output (Q)
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