Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8
-Refer to Figure 26.8. For this economy to produce at Point B and sustain it without inflation,
A) the price of oil must increase.
B) government spending must increase.
C) government spending must decrease.
D) potential output must increase.

Question

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow.  Figure 26.8
-Refer to Figure 26.8. For this economy to produce at Point B and sustain it without inflation,
A) the price of oil must increase. 
B) government spending must increase. 
C) government spending must decrease. 
D) potential output must increase.

Quizplus · Accepted Answer

To sustain production at Point B without inflation, the economy needs to increase its potential output. This can be achieved through investments in technology, education, infrastructure, and other factors that improve productivity. Increasing government spending may lead to inflation, while decreasing government spending may lead to a slowdown in economic growth. The price of oil is not relevant to sustaining production at Point B.

Refer to the Information Provided in Figure 26