14) Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should A) lower government purchases by more than $200 billion. B) lower government purchases by $200 billion. C) lower government purchases by an amount less than $200 billion D) lower taxes by $200 billion. E) raise taxes by an amount more than $200 billion.
14) Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should A) lower government purchases by more than $200 billion. B) lower government purchases by $200 billion. C) lower government purchases by an amount less than $200 billion D) lower taxes by $200 billion. E) raise taxes by an amount more than $200 billion.
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section11.A: Graphical Treatment Of Taxes And Fiscal Policy
Problem 2TY
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