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An economy is at a short-run equilibrium as illustrated in the above figure. An appropriate fiscal
Policy option to move the economy to full employment is to increase
A) tax rates and move the economy to a full-employment equilibrium at point b.
B) government expenditure and move the economy to a full-employment equilibrium at point b.
C) tax rates and move the economy to a full-employment equilibrium at point c.
D) lower the interest rate by increasing the quantity of money and move the economy to a full-employment equilibrium at point b.
E) government expenditure and move the economy to a full-employment equilibrium at point c.
Correct Answer:
Verified
Q58: Q59: If we compare the United States to Q60: The government expenditure multiplier is used to Q61: When the government's outlays equal its tax Q62: The magnitude of the tax multiplier is-------------------- Q64: Needs-tested spending![]()
A)is directing government spending and taxes
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