Figure 10.1
-Refer to Figure 10.1 to answer this question. Which of the following fiscal policies would move the economy from point B to point A?

Question

Quizplus · Accepted Answer

Lowering taxes would increase disposable income and stimulate consumer spending, which would shift the aggregate demand curve to the right and move the economy from point B to point A. Higher taxes and lower government spending would have the opposite effect and would likely shift the aggregate demand curve to the left. Lowering the money supply would primarily affect interest rates and would not necessarily have an immediate impact on output or employment levels.

Figure 10.1 -Refer to Figure 10.1 to Answer This Question. Which of Which