-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