Use the Figure Below to Answer the Following Question(s)

question 142

Multiple Choice

Use the figure below to answer the following question(s) . Figure 12-2
Refer to Figure 12-2. Which of the following will most likely be favored by a Keynesian economist if the economy is operating at point a?

• A) a balanced budget
• B) restrictive fiscal policy
• C) expansionary fiscal policy
• D) continuation of the current tax and expenditure policies (dependence on the economy's self-correcting mechanism to restore full employment)

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