If real GDP is less than potential GDP, which of the following fiscal policies would increase real GDP?

Question

Quizplus · Accepted Answer

Increasing government expenditure and/or decreasing taxes would increase aggregate demand, leading to an increase in real GDP. Decreasing government expenditure and/or increasing taxes would decrease aggregate demand, leading to a decrease in real GDP. Only increasing taxes or only decreasing government expenditure would not be as effective in stimulating economic growth.

If Real GDP Is Less Than Potential GDP, Which of the Following