Use the Following Diagram to Answer the Following Questions

question 101

Multiple Choice

Use the following diagram to answer the following questions.

-Refer to Diagram 13-1. If the economy is currently in equilibrium at point B:

• A) authorities should increase government spending.
• B) authorities should increase taxes.
• C) authorities should decrease the growth rate of the money supply.
• D) authorities should enact regulations to curb inflation.

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Definitions:

Property Rights

Legal rights to possess, use, and dispose of assets including real property (land and buildings) and intellectual property.

Fundamental Function

A basic or essential function that is fundamental to a system or process.

Government

The organization that is the governing authority of a political unit, responsible for creating and enforcing laws and managing public resources and services.

Investment Banks

Financial institutions that assist individuals, corporations, and governments in raising financial capital by underwriting or acting as the client's agent in the issuance of securities.