-In the above figure, which of the following policies could move the economy to potential GDP?
A) increasing government expenditures and decreasing taxes
B) decreasing government expenditures and increasing taxes
C) decreasing taxes and not changing government expenditures
D) None of the above answers is correct.
Correct Answer:
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Q168: Suppose that real GDP equals potential GDP,
Q169: Q170: Suppose real GDP exceeds potential real GDP. Q171: Q172: The use of fiscal policy is limited Q174: If real GDP is less than potential Q175: Suppose that the government decreases its expenditures Q176: When real GDP is less than potential Q177: Q178: Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents