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Use the following to answer questions: Use the following to answer questions:   -(Figure: Short-Run Equilibrium)  Refer to Figure: Short-Run Equilibrium. If the economy is at equilibrium at Y<sub>1</sub> and P<sub>1</sub>, the appropriate policy to return the economy to potential output would be a(n) : A)  increase in transfer payments. B)  increase in government spending. C)  increase in taxes. D)  decrease in taxes.
-(Figure: Short-Run Equilibrium) Refer to Figure: Short-Run Equilibrium. If the economy is at equilibrium at Y1 and P1, the appropriate policy to return the economy to potential output would be a(n) :


Definitions:

P-value

A statistical measure that helps scientists and researchers determine the significance of their results, representing the probability of observing the collected data, or something more extreme, if the null hypothesis were true.

Z-test Approximation

A statistical method that uses the Z-distribution to approximate the significance of observed differences, typically used when sample sizes are large and the standard deviation is known.

Wilcoxon Test Statistic

A non-parametric test statistic used to compare two paired samples to assess whether their population mean ranks differ.

Null Hypothesis

A hypothesis that assumes no statistical significance or effect exists in a set of observations.

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