Refer to the above figure. Suppose the relevant aggregate demand curve is AD2. If the government wants to use fiscal policy to close the existing gap, it should
A) increase government spending.
B) increase taxes.
C) increase the money supply.
D) decrease taxes.
B
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The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is unregulated, it will produce ________ and sell at a price of ________
A) 200 kwh; 10¢ per kwh B) 200 kwh; 30¢ per kwh C) 300 kwh; 20¢ per kwh D) 400 kwh; 10¢ per kwh
Refer to Figure 12-5. What is the minimum price the firm requires to produce output?
A) $20 B) $14 C) $5 D) It cannot be determined
If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely
A) shift leftward. B) shift rightward. C) remain unchanged. D) become steeper.
If the economy in the graph shown were at point B, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase government spending.
B. increase income tax.
C. decrease tax credits.
D. All of these would move the economy to its potential GDP from point B.