Answer to Question #137204 in Macroeconomics for December

Question

41. Within the AD-AS model, what will be the impact of expansionary demand management policy on the economy?

[1] aggregate supply will decrease and the price level increase

[2] aggregate demand will decrease and the price level increase

[3] total production and employment will increase, while inflation decrease

[4] real output and the price level will increase, while unemployment decrease

Answer 1

(4) Real output and the price level will increase, while unemployment decrease.