Question
When the Aggregate Supply curve is in the Intermediate Phase, if the US Federal government increases deficit spending and cuts taxes on individual consumers then:
When the Aggregate Supply curve is in the Intermediate Phase, if the US Federal government increases deficit spending and cuts taxes on individual consumers then:
Answer Choices:
a) C and G increase, Aggregate Demand increases, Real GDP increases and the Price Level (Pl) stays the same
b) C and G increase, Aggregate Demand increases, Real GDP increases and the Price Level (Pl) increases and unemployment increases
c) C and G decrease, Aggregate Demand increases, Real GDP increases and the Price Level (Pl) increases
d) C and G increase, Aggregate Demand increases, Real GDP decreases and the Price Level (Pl) increases
e) C and G increase, Aggregate Demand increases, Real GDP increases and the Price Level (Pl) increases
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