Using Figure 11.5, which fiscal policy action would increase aggregate demand from AD1 to AD2?
A. A decrease in transfer payments.
B. A decrease in taxes.
C. A decrease in government spending.
D. A decrease in government spending matched by an equal a decrease in taxes.
Answer:B
Using Figure 11.5, which fiscal policy action would increase aggregate demand from AD1 to AD2?
A. A decrease in transfer payments. B. A decrease in taxes. C. A decrease in government spending. D. A decrease in government spending matched by an equal a decrease in taxes.