Refer to Figure 13.3 for the Following Question

question 133

Multiple Choice

Refer to Figure 13.3 for the following question.
Figure 13.3

-Refer to Figure 13.3. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?

• A)increase interest rates
• B)increase government spending
• C)decrease interest rates
• D)increase taxes

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Definitions:

Benefit

an advantage or profit gained from something, or the act of improving or advancing in a particular aspect.

Requirement

A specified necessity; conditions or capabilities needed by a user to solve a problem or achieve an objective.

Negative Connotations

Implications or associations of a word or phrase that evoke negative feelings or perceptions.

Fail

to fall short of success in achieving a goal or meeting a standard, often leading to negative consequences or the need for reevaluation.