SectionsTest Prep For AP® Courses
Test Prep For AP® Courses
Which of the following is most likely to shift the AS curve to the right?
- technological growth
- a decrease in investment
- an increase in government spending
- income taxes increase
- exports increase
During a recession, governments often try to shift the ________ curve to the right by ________.
- AS; increasing taxes
- AS; increasing firm productivity
- AD; increasing imports
- AD; increasing taxes
- AD; increasing government spending
Draw an AD and SRAS diagram and label both axes clearly.
- Illustrate the effects of each of the following events on equilibrium real GDP and price level: an increase in firm productivity; a reduction in government spending; a reduction in the trade balance.
- Draw and AD and SRAS diagram and label both axes clearly
- List and explain one possible policy or event that could eliminate the inflationary gap you showed in part (b). Show on your diagram how the policy or event would return the economy to long run equilibrium.