3) A decrease in taxes should be applied in a situation with a recessionary gap. an inflationary gap. low unemployment. high demand for goods and services. 4) If the economy has been producing at a point where real GDP is less than potential GDP, what fiscal policy can the federal government use to restore real GDP to potential GDP? cut government expenditure on goods and services. increase taxes. cut taxes. raise the interest rate.

3) A decrease in taxes should be applied in a situation with a recessionary gap. an inflationary gap. low unemployment. high demand for goods and services. 4) If the economy has been producing at a point where real GDP is less than potential GDP, what fiscal policy can the federal government use to restore real GDP to potential GDP? cut government expenditure on goods and services. increase taxes. cut taxes. raise the interest rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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