Suppose the economy is at a position below its institutional production possibilities frontier.To improve this situation,Keynesian economists might propose that government __________ taxes,which will cause the aggregate demand curve to shift to the __________ and Real GDP will __________.
A) increase; right; increase
B) increase; left; decrease
C) decrease; left; decrease
D) decrease; right; decrease
E) decrease; right; increase

Question

Quizplus · Accepted Answer

Keynesian economists advocate for decreasing taxes to stimulate consumer spending and investment. This leads to a rightward shift in the aggregate demand curve, which increases Real GDP.

Suppose the Economy Is at a Position Below Its Institutional