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Exhibit 11-6 Aggregate Demand and Supply Model

Question 83

Multiple Choice

Exhibit 11-6 Aggregate demand and supply model

In Exhibit 11-6, if the aggregate demand curve is at AD₂, the government should:

A) raise taxes to move to AD₁.
B) not change its policy.
C) cut taxes to move to AD₃.
D) cut spending to move to AD₃.

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