Use the following to answer questions .
Exhibit: Fiscal Policy Options 
-(Exhibit: Fiscal Policy Options) If the aggregate demand curve is AD2, which of the following is the most appropriate discretionary fiscal policy to pursue?
A) a contractionary fiscal policy involving reductions in government spending and decreases in income tax rates
B) a contractionary fiscal policy involving reductions in government spending and increases in income tax rates
C) an expansionary fiscal policy involving increases in government spending and increases in income tax rates
D) an expansionary fiscal policy involving increases in government spending and decreases in income tax rates
Correct Answer:
Verified
Q95: An increase in government transfer payments will
Q96: Consider two fiscal policy actions.
I. a $400
Q97: Suppose a country institutes an investment tax
Q98: Suppose a country decreases government purchases by
Q99: Use the following to answer questions .
Exhibit:
Q101: The term "crowding out" refers to the
Q102: Which of the following statements is true
Q103: Which of the following statements is true
Q104: Some economists argue that
A) discretionary monetary policy
Q105: Suppose the government increases government purchases and
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