From an initial long-run equilibrium,if aggregate demand grows more slowly than long-run and short-run aggregate supply,then Congress and the president would most likely
A)increase the required reserve ratio and decrease government spending.
B)decrease government spending.
C)decrease oil prices.
D)decrease taxes.
E)lower interest rates.

Question

Quizplus · Accepted Answer

Decreasing taxes would increase aggregate demand, helping to balance it with the growing aggregate supply.

From an Initial Long-Run Equilibrium,if Aggregate Demand Grows More Slowly