Multiple Choice
On an aggregate supply and aggregate demand graph, if the short-run equilibrium is above 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 aggregate demand curve to the left.
B) Increase government spending to shift the aggregate demand curve to the right.
C) Increase taxes to shift the short-run aggregate supply curve to the right.
D) Decrease taxes to shift the short-run aggregate supply curve to the left.
Correct Answer:
Verified
Correct Answer:
Verified
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