Figure 27-8
-Refer to Figure 27-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) increase government purchases
B) decrease government purchases
C) increase income taxes
D) sell Treasury bills

Question

Figure 27-8 
-Refer to Figure 27-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) increase government purchases 
B) decrease government purchases 
C) increase income taxes 
D) sell Treasury bills

Quizplus · Accepted Answer

Increasing government purchases is an expansionary fiscal policy that can shift the aggregate demand curve to the right, moving the economy from point B to point C.

Figure 27-8 -Refer to Figure 27-8. in the Graph Above, Suppose the Above