Use the figure below to answer the following questions.
Figure 10.3.3
-Refer to Figure 10.3.3a.You might expect the government to
A)cut government expenditure.
B)increase government expenditure.
C)raise taxes.
D)do nothing except maintain the current equilibrium.
E)pursue trade policies that reduce exports.

Question

Use the figure below to answer the following questions.
  Figure 10.3.3
-Refer to Figure 10.3.3a.You might expect the government to
A)cut government expenditure. 
B)increase government expenditure. 
C)raise taxes. 
D)do nothing except maintain the current equilibrium. 
E)pursue trade policies that reduce exports.

Quizplus · Accepted Answer

Increasing government expenditure is a common fiscal policy tool used to stimulate economic activity, especially if the economy is underperforming or in a recession, which might be indicated by the context of Figure 10.3.3a.

Use the Figure Below to Answer the Following Questions