Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion.To move the economy back to potential GDP,Congress should
A) lower government purchases by an amount less than $200 billion.
B) lower government purchases by $200 billion.
C) raise taxes by $200 billion.
D) lower taxes by $200 billion.
E) raise taxes by an amount more than $200 billion.
Correct Answer:
Verified
Q134: Table 16-6 Q135: Use the dynamic aggregate demand and aggregate Q136: The aggregate demand curve will shift to Q137: Suppose Congress increased spending by $100 billion Q138: A decrease in the tax rate will Q140: The aggregate demand curve will shift to Q141: A cut in tax rates effects equilibrium Q142: The multiplier effect is the series of Q143: If the government purchases multiplier equals 2,and Q144: The government purchases multiplier is defined as
A)
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