Exhibit 16A-3 Macro AD\AS Models in Panel (B)of Exhibit

Multiple Choice

Exhibit 16A-3 Macro AD\AS Models In Panel (b) of Exhibit 16A-3, the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂. If the federal government or Fed decides to intervene, it would most likely:

A) decrease taxes.
B) increase the money supply.
C) increase the level of government spending for goods and services.
D) decrease the level of government spending for goods and services.