Multiple Choice
The GDP for the nation of Economia is currently below potential output. If the adjustment to the long-run equilibrium occurs slowly, the government of Economia is likely to pursue a policy of
A) increasing government spending to increase aggregate demand.
B) decreasing the money supply to increase aggregate demand.
C) taking no action and allowing the economy to adjust naturally.
D) decreasing government spending to increase aggregate demand.
Correct Answer:
Verified
Correct Answer:
Verified
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