FIGURE 24-2 -Refer to Figure 24-2.Suppose the Economy Is in a Short-Run

question 129

Multiple Choice

FIGURE 24-2
-Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y₁.An appropriate fiscal policy for attaining potential output (Y^*) is a(n)

• A)increase in personal and corporate tax rates.
• B)increase in government spending.
• C)increase in current consumption.
• D)decrease in personal and corporate taxes.
• E)decrease in current imports.

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Definitions:

Simplify

To reduce a mathematical expression or equation to its simplest form, making it easier to understand or solve.

Division

A mathematical operation in which a number, the dividend, is divided by another number, the divisor, to produce a quotient.

Simplify

To reduce a mathematical expression or equation to its simplest form without changing its value.

Complex Fraction

This refers to a fraction wherein the numerator and/or denominator is also a fraction.