Refer to Figure 18.2 for the Following Question

question 31

Multiple Choice

Refer to Figure 18.2 for the following question.
Figure 18.2
-In Figure 18.2,suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B.Which of the following policies could the government use to move the economy to point C?

• A) Decrease income taxes
• B) Decrease government purchases
• C) Increase income taxes
• D) Sell commonwealth government bonds and securities

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Definitions:

Air Pollution

The presence of harmful or excessive quantities of substances, including gases, particulates, and biological molecules, in the Earth's atmosphere, causing diseases, allergies, or environmental damage.

Donations

Voluntary transfers of resources, including money or goods, from one party to another without the expectation of receiving something in return.

External Benefits

The positive effects of a production or consumption activity on third parties who are not directly involved in the transaction.

Efficient Level

The optimal point of production or operation where resources are utilized in the most effective manner, without waste, to achieve a desired outcome or maximized benefit.