The Figure Given Below Shows the Macroeconomic Equilibria of a Country

question 92

Multiple Choice

The figure given below shows the macroeconomic equilibria of a country.
Figure 11.1

-Refer to Figure 11.1. A decrease in government spending would be most effective in reducing the price level if the economy were in equilibrium:

• A) at point A.
• B) at point B.
• C) when real GDP equals Y₁.
• D) when real GDP equals Y₃.
• E) when real GDP equals Y₂.

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