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Exhibit 11-6 Aggregate Demand and Supply Model

Question 48

Multiple Choice

Exhibit 11-6 Aggregate demand and supply model
Exhibit 11-6 Aggregate demand and supply model In Exhibit 11-6, if the aggregate demand curve is at AD<sub>3</sub>, the government should: A) raise taxes to move to AD<sub>1</sub>. B) cut taxes to move to AD<sub>2</sub>. C) not change its behavior. D) cut spending to move to AD<sub>2</sub>.
In Exhibit 11-6, if the aggregate demand curve is at AD3, the government should:


A) raise taxes to move to AD1.
B) cut taxes to move to AD2.
C) not change its behavior.
D) cut spending to move to AD2.

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