Business, 17.04.2020 00:11 taetae83

Consider the figures to the right. Which of the following combinations of specific fiscal policy will return the economy to long-run macroeconomic equilibrium (point C)? That is, what policy will move aggregate demand from AD 2AD2 to AD Subscript 2 comma (policy )AD2, (policy) in the second period? A. Example (A): Decrease government spending Example (B): Decrease government spending B. Example (A): Increase taxes Example (B): Increase government spending C. Example (A): Increase government spending Example (B): Increase taxes D. Example (A): Decrease government spending Example (B): Decrease taxes

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Consider the figures to the right. Which of the following combinations of specific fiscal policy wil...

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