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-**What type of fiscal policy would shift aggregate demand from AD₃ to AD₄?

Question

Use the graph to answer questions -**What type of fiscal policy would shift aggregate demand from AD₃ to AD₄?

Quizplus · Accepted Answer

Moving aggregate demand from AD₃ to AD₄ would shift the equilibrium point to the right, increasing both output and price level. This suggests that an expansionary fiscal policy is needed, such as an increase in government spending or a tax cut, to increase aggregate demand and stimulate economic growth.

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