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Use the Following to Answer Question 132

question 266

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Use the following to answer question 132:
Figure: Short-Run Equilibrium Use the following to answer question 132: Figure: Short-Run Equilibrium -(Figure: Short-Run Equilibrium) Look at the figure Short-Run Equilibrium. The economy is in short-run equilibrium. To move the economy to potential GDP, the government should reduce its spending by an amount equal to: A) (Y<sub>1</sub> - Y<sub>P</sub>) . B) (Y<sub>1</sub> - Y<sub>P</sub>) / (1 - MPC) . C) (Y<sub>1</sub> - Y<sub>P</sub>) MPC. D) (Y<sub>1</sub> - Y<sub>P</sub>) (1 - MPC) .
-(Figure: Short-Run Equilibrium) Look at the figure Short-Run Equilibrium. The economy is in short-run equilibrium. To move the economy to potential GDP, the government should reduce its spending by an amount equal to:

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