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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?

 

Hint


Question 2

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

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

 

Hint


Question 3

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

How big is the recessionary gap?

 

Hint


Question 4

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

Suppose that the government expenditure multiplier is equal to 4.

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 Canada.

How big is the inflationary gap?

 

Hint


Question 6

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

Suppose that the government expenditure multiplier is equal to 7.

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

 

Hint