2170EconomicsMedium
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?
Adecrease taxes, which shifts the aggregate demand curve to the right
Bdecrease taxes, which shifts the aggregate demand curve to the left
Cdecrease government spending which shifts the aggregate demand curve to the right
Ddecrease government spending Which the shifts the aggregate demand curve to the left
Correct answer
D. decrease government spending Which the shifts the aggregate demand curve to the left
Explanation
The correct answer is decrease government spending Which the shifts the aggregate demand curve to the left.