Figure 16-1 -Refer to Figure 16-1. Consider Point a Where Inflation Is

question 125

Multiple Choice

Figure 16-1
-Refer to Figure 16-1. Consider point A where inflation is relatively high and unemployment is relatively low. In order to move down the curve toward point B, what fiscal policy measures should the policymakers undertake?

• A) Decrease taxes and government spending
• B) Increase taxes and government spending
• C) Increase taxes and decrease government spending
• D) Decrease taxes and increase government spending

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Definitions:

Time Consumers

Activities or processes that require a significant amount of an individual's or organization's time.

Tax Revenue

The income that is gained by governments through taxation.

Demand Elastic

The responsiveness of demand for a good or service to changes in its price, income levels, or substitute and complementary products' prices.