Suppose That Consumer Spending Is Expected to Decrease in the near Future.If

question 20

Multiple Choice

Suppose that consumer spending is expected to decrease in the near future.If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?

• A)An increase in government spending
• B)Aan increase in taxes
• C)A reduction in government spending
• D)No change in taxes or government spending