Use the following figure to answer the questions : Figure9.8

- In Figure 9.8,if full-employment income is produced at $400 billion,which of the following can prevent a recession?
A)An increase in government spending.
B)An increase in taxes.
C)An increase in interest rates.
D)An increase in saving.

Question

Use the following figure to  answer the questions : Figure9.8

- In Figure 9.8,if full-employment income is produced at $400 billion,which of the following can prevent a recession?
A)An increase in government spending. 
B)An increase in taxes. 
C)An increase in interest rates. 
D)An increase in saving.

Quizplus · Accepted Answer

An increase in government spending would shift the aggregate demand curve to the right, which would increase output and prevent a recession. B would decrease aggregate demand, C would decrease investment spending, and D would decrease aggregate demand as well.

Use the Following Figure to Answer the Questions