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Exhibit 11-3 Aggregate Demand and Supply Model Beginning at Equilibrium

Question 144

Multiple Choice

Exhibit 11-3 Aggregate demand and supply model Exhibit 11-3 Aggregate demand and supply model Beginning at equilibrium E<sub>1</sub> in Exhibit 11-3, when the government increases spending or cuts taxes the economy will experience: A) an inflationary recession. B) stagflation. C) cost-push inflation. D) demand-pull inflation. Beginning at equilibrium E1 in Exhibit 11-3, when the government increases spending or cuts taxes the economy will experience:


A) an inflationary recession.
B) stagflation.
C) cost-push inflation.
D) demand-pull inflation.

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