Figure 32-2 ​

question 59

Multiple Choice

Figure 32-2
​
-Suppose that Figure 32-2 shows the effects of reducing the budget deficit by raising taxes.If authorities do not want real GDP to fall, monetary policy must

• A)become sufficiently more expansionary to restore the aggregate demand curve to D₀D₀.
• B)contract aggregate demand to be consistent with deficit-reducing fiscal policy.
• C)not lower interest rates and thwart the goal of a balanced budget.
• D)become more contractionary to lower the interest rate and spur investment.

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Definitions:

American Manufacturers

refers to businesses and individuals involved in the production of goods within the United States, contributing to the country's industrial and economic growth.

Foreign Locations

refers to places outside one's own country, often implying a context of international affairs or travel.

Eagle Forum

A conservative interest group in the United States, known for its advocacy on social issues.

Equal Rights Amendment

A proposed amendment to the United States Constitution designed to guarantee equal legal rights for all American citizens regardless of sex.