The figure above shows an economy's aggregate demand curve and aggregate supply curve.
-Suppose the shift from AD₀ to AD₁ and from AS₀ to AS₁ in the figure above is the result of fiscal policy.Which of the policies below could lead to these shifts?
i.An increase in government expenditure
ii.A tax cut
iii.A decrease in government expenditure
iv.A tax increase
A) iv only
B) iii and iv
C) i and iv
D) i and ii
E) i only
Correct Answer:
Verified
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