Macroeconomic Policy Tools

Q.  Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ?

a. decrease government spending Which the shifts the aggregate demand curve to the left
b. decrease taxes, which shifts the aggregate demand curve to the right
c. decrease taxes, which shifts the aggregate demand curve to the left
d. decrease government spending which shifts the aggregate demand curve to the right


ANSWER: See Answer
 
No explanation is available for this question!
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