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Using Figure 11

Question 98

Multiple Choice

Using Figure 11.1,which fiscal policy action would increase aggregate demand from AD<sub>1</sub> to AD<sub>3</sub>? A) A decrease in transfer payments. B) A decrease in taxes. C) A decrease in government spending. D) A decrease in government spending matched by an equal decrease in taxes. Using Figure 11.1,which fiscal policy action would increase aggregate demand from AD1 to AD3?


A) A decrease in transfer payments.
B) A decrease in taxes.
C) A decrease in government spending.
D) A decrease in government spending matched by an equal decrease in taxes.

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