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Question: first drop down options 1 expansionary 2 contractionary second drop...

Question details

The figure on the right shows an economy in overall equilibrium at point A If the output level associated with this point corresponds to an unacceptably high inflation rate, the government may pursue a fiscal policy that is Show the effects of this policy on output in the accompanying figure 1.) Using either the 3-point curved line drawing tool or the line drawing tool, draw a new curve. Label your curve appropriately. 2.) Using the point drawing tool, identify the new equilibrium point. Label your point LM A Carefully follow the instructions above and only draw the required objects The specific tax and spending actions of this policy would IS V the budget deficit. Output, Y

First Drop Down Options
1. Expansionary

2. Contractionary

Second Drop Down Options

1. increase

2. Decrease

3. not change

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