An Economy's Potential Output Is Equal to $232 Billion,and Its

question 167

Multiple Choice

An economy's potential output is equal to $232 billion,and its current output is equal to $230 billion.To return the economy to long-run equilibrium,the government should

• A) increase spending by $2 billion.
• B) decrease spending by $2 billion.
• C) increase spending by more than $2 billion.
• D) increase spending by less than $2 billion.
• E) decrease spending by less than $2 billion.

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