-Refer to the above figure. Suppose the relevant aggregate demand curve is AD₂. If the government wants to use fiscal policy to close the existing gap, it should
A)increase taxes.
B)decrease taxes.
C)increase the money supply.
D)increase government spending.

Question

-Refer to the above figure. Suppose the relevant aggregate demand curve is AD₂. If the government wants to use fiscal policy to close the existing gap, it should
A)increase taxes. 
B)decrease taxes. 
C)increase the money supply. 
D)increase government spending.

Quizplus · Accepted Answer

The Answer of 
-Refer to the above figure. Suppose the relevant aggregate demand curve is AD₂. If the government wants to use fiscal policy to close the existing gap, it should
A)increase taxes. 
B)decrease taxes. 
C)increase the money supply. 
D)increase government spending.

-Refer to the Above Figure