Figure 27-2
-Refer to Figure 27-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by Congress and the president would be to
A) lower the discount rate of interest.
B) execute an open market sale of government securities.
C) increase government transfer payments.
D) increase marginal income tax rates.

Question

Figure 27-2 
-Refer to Figure 27-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by Congress and the president would be to
A) lower the discount rate of interest. 
B) execute an open market sale of government securities. 
C) increase government transfer payments. 
D) increase marginal income tax rates.

Quizplus · Accepted Answer

Increasing government transfer payments is an expansionary fiscal policy that can help stimulate economic activity when the economy is at a point like A, which likely indicates underperformance or recession.

Figure 27-2 -Refer to Figure 27-2. in the Graph Above, If the Above