Use the Following to Answer Questions

question 214

Multiple Choice

Use the following to answer questions:
Figure: Short-Run Equilibrium
-(Figure: Short-Run Equilibrium) Look at the figure Short-Run Equilibrium. If the economy is at equilibrium at Y₁ and P₁, the appropriate policy to return the economy to potential output would be a(n) :

• A)increase in transfer payments.
• B)increase in government spending.
• C)increase in taxes.
• D)decrease in taxes.

---

Definitions:

Democratic

Pertaining to a system of government or organization where decisions are made by the majority or through elected representatives.

Life Span Developmental

The study of how individuals grow and change from infancy through old age, encompassing physical, cognitive, and socioemotional development.

Human Development

The process of growth and change that occurs throughout a person’s life, encompassing physical, cognitive, and socioemotional changes.

Adaptation

The process of adjusting or conforming to new conditions or environments.