-Refer to the above figure. Suppose the relevant aggregate demand curve is . If the government wants to use discretionary fiscal policy to close the existing gap, it should
A) decrease taxes.
B) increase taxes.
C) increase the money supply.
D) decrease government spending.

Question

-Refer to the above figure. Suppose the relevant aggregate demand curve is  . If the government wants to use discretionary fiscal policy to close the existing gap, it should
A) decrease taxes. 
B) increase taxes. 
C) increase the money supply. 
D) decrease government spending.

Quizplus · Accepted Answer

The Answer of 
-Refer to the above figure. Suppose the relevant aggregate demand curve is  . If the government wants to use discretionary fiscal policy to close the existing gap, it should
A) decrease taxes. 
B) increase taxes. 
C) increase the money supply. 
D) decrease government spending.

-Refer to the Above Figure