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FIGURE 24-2 -Refer to Figure 24-2.Suppose the Economy Is in a Short-Run

Question 107

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  FIGURE 24-2 -Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y<sub>1</sub>.An appropriate fiscal policy for attaining potential output (Y<sup>*</sup>) is a(n)  A) increase in personal and corporate tax rates. B) increase in government spending. C) increase in current consumption. D) decrease in personal and corporate taxes. E) decrease in current imports. FIGURE 24-2
-Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y1.An appropriate fiscal policy for attaining potential output (Y*) is a(n)


A) increase in personal and corporate tax rates.
B) increase in government spending.
C) increase in current consumption.
D) decrease in personal and corporate taxes.
E) decrease in current imports.

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