FIGURE 24-2 -Refer to Figure 24-2.Suppose the Economy Is in a Short-Run

Multiple Choice

FIGURE 24-2
-Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y₁.An appropriate fiscal policy for attaining potential output (Y^*) is a(n)

A) increase in personal and corporate tax rates.
B) increase in government spending.
C) increase in current consumption.
D) decrease in personal and corporate taxes.
E) decrease in current imports.