Refer to Figure 16.4. If the economy is initially in equilibrium at P3 and Q1, which of the following policies would move the economy to equilibrium at P2 and Q3?
A. Restrictive supply-side policy alone.
B. A combination of restrictive fiscal policy and restrictive monetary policy.
C. A combination of expansionary monetary policy and expansionary supply-side policy.
D. Contractionary monetary policy alone.
Answer: C
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