Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to B.
B) C to B.
C) A to E.
D) B to A.
E) B to C.
Ans: A) A to B.
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