09-03-2009 112151 PM

09-03-2009 112151 PM - C a reduction in government spending...

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•*- I B AD Real Hationai Ittcome (GDP) FIGURE 24-1 12) Referring to Figure 24-1, where the economy is currently in equilibrium at YQ, the appropriate fiscal policy response, to attain full employment output (Y*), is A) an increase in personal income taxes. B) an increase in corporate income taxes.
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Unformatted text preview: C) a reduction in government spending on goods and services. D) an increase in interest rates to encourage increased savings. E) an increase in government spending or reduction in personal income taxes or a combination oi both. 12)...
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