I need help to solve these questions
According to the classical economist, the best thing to do if a decrease in aggregate demand causes real GDP to be less than capacity GDP is...
a) increase aggregate demand by raising government spending
b) increase aggregate demand by raising the money supply
c) increaseaggregatee supply by investing human capital in the labor market
d) nothing
e)both (a) and (c) above would be satisfactory answers
When an economy is characterized by rising prices and positive cyclical unemployment, the "textbook" response is ...
a) raise "G" cut taxes, and increase the money supply to stimulate Aggregate Demand
b) raise "G" and cut the money supply at the same time ro raise AD and lower prices
c) cut the money supply to lower the price level and allow AS to increase in response
d) cut "G" and taxes, and raise the money supply at the same time to decrease AS
e) none of the above
According to the classical economist, the best thing to do if a decrease in aggregate demand causes real GDP to be less than capacity GDP is...
a) increase aggregate demand by raising government spending
b) increase aggregate demand by raising the money supply
c) increaseaggregatee supply by investing human capital in the labor market
d) nothing
e)both (a) and (c) above would be satisfactory answers
When an economy is characterized by rising prices and positive cyclical unemployment, the "textbook" response is ...
a) raise "G" cut taxes, and increase the money supply to stimulate Aggregate Demand
b) raise "G" and cut the money supply at the same time ro raise AD and lower prices
c) cut the money supply to lower the price level and allow AS to increase in response
d) cut "G" and taxes, and raise the money supply at the same time to decrease AS
e) none of the above