From an initial long-run equilibrium, if aggregate demand grows slower than long-run aggregate supply while the short-run aggregate supply is unchanged, then the proper fiscal policy is to Group of answer choices increase government purchases. decrease government purchases and tax rates by the same amount. increase the money supply. increase lump-sum taxes.
From an initial long-run equilibrium, if aggregate demand grows slower than long-run aggregate supply while the short-run aggregate supply is unchanged, then the proper fiscal policy is to Group of answer choices increase government purchases. decrease government purchases and tax rates by the same amount. increase the money supply. increase lump-sum taxes.
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 1SQ
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From an initial long-run equilibrium, if aggregate demand grows slower than long-run aggregate supply while the short-run aggregate supply is unchanged, then the proper fiscal policy is to
Group of answer choices
increase government purchases.
decrease government purchases and tax rates by the same amount.
increase the money supply.
increase lump-sum taxes.
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