Suppose the Economy Is at a Short Run Equilibrium and Is

question 76

Multiple Choice

Suppose the economy is at a short run equilibrium and is beyond the economy's long run potential level of real GDP.Which of the following fiscal policies would reduce output and prices in the short run?

• A)an increase in government spending
• B)a reduction in taxes
• C)an increase in taxes
• D)an increase in interest rates

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Definitions:

Tetracycline

A broad-spectrum antibiotic used to treat various infections caused by bacteria, including those of the skin, intestine, and respiratory tract.

Yellowed Teeth

A condition where teeth become discolored, often due to aging, diet, or smoking, leading to a yellow appearance.

Bone Abnormalities

Any deviation from the normal structure or function of the skeleton, which can impact mobility, stability, and overall health.

Diethylstilbestrol (DES)

A synthetic form of estrogen that was once prescribed to pregnant women to prevent miscarriages but was later found to cause significant health issues in their children.