how-might-expansionary-fiscal-policy-interact-with-the-dynamic-ad-as-model-to-in

Question

How might expansionary fiscal policy interact with the dynamic AD-AS model to influence economic outcomes?

Accepted Answer

It shifts the aggregate demand curve to the right, increasing GDP and potentially increasing price levels.

Answer

It has no effect on aggregate demand or supply.

Answer

It shifts the long-run aggregate supply curve to the left, decreasing GDP.

Answer

It shifts the aggregate demand curve to the left, decreasing GDP.