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The Diagram Below Shows an AD/AS Model for a Hypothetical

Question 36

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The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. FIGURE 24-6 -Refer to Figure 24-6.The government could close the existing output gap by A) increasing the net tax rate. B) decreasing the net tax rate. C) decreasing government purchases. D) decreasing government transfer payments. E) implementing a contractionary fiscal policy. FIGURE 24-6
-Refer to Figure 24-6.The government could close the existing output gap by


A) increasing the net tax rate.
B) decreasing the net tax rate.
C) decreasing government purchases.
D) decreasing government transfer payments.
E) implementing a contractionary fiscal policy.

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