In Figure 8

question 16

Multiple Choice

In Figure 8.5,according to Keynesians,if equilibrium real output is Q₁ and full-employment real output is Q₂,an appropriate fiscal policy lever would be to

• A)Increase AD by increasing income taxes.
• B)Increase AD by increasing government spending.
• C)Increase AS by reducing government regulations.
• D)Reduce AS by tightening air pollution standards to improve air quality.

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Definitions:

Functional MRI

A neuroimaging procedure that measures and maps the brain's activity by detecting changes associated with blood flow, used particularly in studying brain functions.

Cognitive Task

A mental activity or exercise designed to measure or enhance cognitive abilities such as memory, attention, or problem-solving.

Electroencephalogram

A test or record of brain activity produced by electroencephalography, showing the electrical activity of the brain.

Electromyogram

A diagnostic test that measures the electrical activity of muscles at rest and during contraction to assess their health and function.