Use the following to answer questions:
-(Figure: Fiscal Policy Options)Refer to Figure: Fiscal Policy Options.If the aggregate demand curve is AD' ,the most appropriate discretionary fiscal policy is to _____ government spending and _____ income tax rates.
A) increase;increase
B) increase;decrease
C) decrease;increase
D) decrease;decrease

Question

Use the following to answer questions: 
-(Figure: Fiscal Policy Options)Refer to Figure: Fiscal Policy Options.If the aggregate demand curve is AD' ,the most appropriate discretionary fiscal policy is to _____ government spending and _____ income tax rates.
A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease

Quizplus · Accepted Answer

To boost aggregate demand, the government should increase spending and decrease income tax rates, which will encourage consumption and investment.

Use the Following to Answer Questions