Which of the Following May Be an Appropriate Policy If

question 4

Multiple Choice

Which of the following may be an appropriate policy if real equilibrium GDP falls below the long-run aggregate supply curve?

• A) An increase in government purchases.
• B) Contractionary fiscal policy to increase the budget surplus.
• C) An increase in individual income taxes to balance the budget.
• D) An increase in business income taxes to increase tax fairness.

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