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Question 1

The graph below shows the AD-AS diagram for Mexico.

What type of the GDP gap is observed in Mexico?

 

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Question 2

The graph below shows the AD-AS diagram for the US.

What type of fiscal policy should the government of the US be implementing to bring the economy to the long-run equilibrium?

 

Hint


Question 3

The graph below shows the AD-AS diagram for Canada.

How big is the recessionary gap?

 

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Question 4

The graph below shows the AD-AS diagram for Spain.

Suppose that the government expenditure multiplier is equal to 6.

By how much should the government increase government expenditures (G) in order to close this recessionary gap?

 

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Question 5

The graph below shows the AD-AS diagram for Brazil.

How big is the inflationary gap?

 

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Question 6

The graph below shows the AD-AS diagram for Brazil.

Suppose that the government expenditure multiplier is equal to 10.

By how much should the government decrease government expenditures (G) in order to close this inflationary gap?

 

Hint