macroeconomics helps?

Question

2) it is inflationary for gov't to increase spending if:
a) the economy is at full employment
b) aggregate supply curve is flat
c) equilibrium real gdp is well below full employment
d) it also cuts taxes


3) automatic stabilizers tend to stabilize the level of real gdp becausse:

1) the spending and tax multiplier are constant
2) federal expenditures and tax revenues change as the leve of real gdp changes
3) congress quickly changes spending and tax revenue
4) wages are controlled by the min wage law.

are both answers b?

Answer 1

Answer for 2) is A.

When an economy is at full employment, there's no capacity to increase supply even though there is an increase in aggregate demand. When too much money are chasing too few goods, there will be inflation.

Answer for 3) is B.

Automatic stabiliser smoothes out the fluctuations in disposable income without deliberate govt action. Tax revenues and gov expenditure will change accordingly to level of income. People with increased income will be taxed at a higher rate. On the other hand, when in a slump, people are entitled to unemployment benefits.

Answer 2

c.
4 (IDK 4 sure)