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If the Economy in the Graph Shown Is at Point

Question 14

Multiple Choice

If the economy in the graph shown is at point D, and the government wished to bring the economy back to its long-run equilibrium, it might: A) increase government spending. B) decrease income taxes. C) increase corporate income taxes. D) All of these would bring the economy back to potential GDP. If the economy in the graph shown is at point D, and the government wished to bring the economy back to its long-run equilibrium, it might:


A) increase government spending.
B) decrease income taxes.
C) increase corporate income taxes.
D) All of these would bring the economy back to potential GDP.

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