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FIGURE 24-2 Refer to Figure 24-2

Question 120

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FIGURE 24-2 Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y<sub>1</sub>.An appropriate fiscal policy for closing the output gap is A) a decrease in personal income taxes. B) a decrease in government purchases. C) an increase in current interest rates. D) an increase in government purchases. E) a decrease in corporate income-tax rates. FIGURE 24-2 Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y1.An appropriate fiscal policy for closing the output gap is


A) a decrease in personal income taxes.
B) a decrease in government purchases.
C) an increase in current interest rates.
D) an increase in government purchases.
E) a decrease in corporate income-tax rates.

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