Multiple Choice
Use the following to answer questions .
Exhibit: Using the Aggregate Demand/Aggregate Supply Model 2 
-(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 2) Suppose the economy is initially in short-run equilibrium at K. Which of the following stabilization policies could be used to close the gap?
A) Decrease government welfare spending
B) Decrease personal income taxes
C) Decrease government spending on defense
D) Increase payroll taxes
Correct Answer:
Verified
Correct Answer:
Verified
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