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question 78

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Use the following to answer questions: Use the following to answer questions:   -(Figure: Fiscal Policy Choices)  Refer to Figure: Fiscal Policy Choices. If the government uses discretionary fiscal policy for the economy in panel (b)  when real GDP is Y<sub>1</sub>, government spending is likely to be _____ and taxes are likely to be _____. A)  reduced; cut B)  increased; increased C)  reduced; increased D)  increased; cut
-(Figure: Fiscal Policy Choices) Refer to Figure: Fiscal Policy Choices. If the government uses discretionary fiscal policy for the economy in panel (b) when real GDP is Y1, government spending is likely to be _____ and taxes are likely to be _____.


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