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Question 6

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Use the following to answer questions:
Figure: Policy Alternatives Use the following to answer questions: Figure: Policy Alternatives -(Figure: Policy Alternatives) Refer to Figure: Policy Alternatives. If the economy is in equilibrium at Y<sub>1</sub> in panel (a) and the government decides to intervene, it will MOST likely: A) increase taxes. B) decrease the money supply. C) increase its spending. D) decrease its spending.
-(Figure: Policy Alternatives) Refer to Figure: Policy Alternatives. If the economy is in equilibrium at Y1 in panel (a) and the government decides to intervene, it will MOST likely:


A) increase taxes.
B) decrease the money supply.
C) increase its spending.
D) decrease its spending.

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