(Figure: Short-Run Equilibrium) Use Figure: Short-Run Equilibrium. If the economy is in equilibrium at Y1 and P1, a policy that would move the economy toward potential output would be a(n) :
A) increase in transfer payments
B) increase in transfer payments.
C) increase in government spending
D) increase in government spending.
E) increase in taxes
F) increase in taxes.
G) decrease in taxes.
H) decrease in taxes
Correct Answer:
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