An economy is at a short-run equilibrium as illustrated in the above figure. An appropriate fiscal policy option to move the economy to full employment is to
A) lower the interest rate by increasing the quantity of money and move the economy to a full-employment equilibrium at point b.
B) increase government expenditure and move the economy to a full-employment equilibrium at point b.
C) increase tax rates and move the economy to a full-employment equilibrium at point c.
D) increase government expenditure and move the economy to a full-employment equilibrium at point c.
E) increase tax rates and move the economy to a full-employment equilibrium at point b.
B
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