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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