A Supply-Side Policy Approach in Figure 8

Multiple Choice

A supply-side policy approach in Figure 8.3,given AD₁ and AS₁,to achieve both lower prices and more output would be to

A) Increase the growth of the money supply.
B) Reduce marginal tax rates and government regulation in an effort to move AS₁ to AS₂
C) Wait until natural market forces establish full employment.
D) Increase aggregate spending.