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In Figure 8

Question 59

Multiple Choice

In Figure 8.5,according to Keynesians,if equilibrium real output is Q<sub>1</sub> and full-employment real output is Q<sub>2</sub>,an appropriate fiscal policy lever would be to A) Increase AD by increasing income taxes. B) Increase AD by increasing government spending. C) Increase AS by reducing government regulations. D) Reduce AS by tightening air pollution standards to improve air quality. In Figure 8.5,according to Keynesians,if equilibrium real output is Q1 and full-employment real output is Q2,an appropriate fiscal policy lever would be to


A) Increase AD by increasing income taxes.
B) Increase AD by increasing government spending.
C) Increase AS by reducing government regulations.
D) Reduce AS by tightening air pollution standards to improve air quality.

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