Multiple Choice
On an aggregate supply and aggregate demand graph, if the short-run equilibrium is below full employment, which of the following fiscal policies could be used to move the economy to full employment?
A) Decrease government spending to shift the short-run aggregate supply curve to the right.
B) Increase government spending to shift the short-run aggregate supply curve to the left.
C) Increase taxes to shift the aggregate demand curve to the left.
D) Decrease taxes to shift the aggregate demand curve to the right.
Correct Answer:
Verified
Correct Answer:
Verified
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