26 Jul WHAT ACTIONS CAN CONGRESS AND THE PRESIDENT TAKE TO MOVE THE ECONOMY BACK TO POTENTIAL GDP?
(22) The graph to the right shows a situation in which the economy was in equilibrium at potential G Show more (22) The graph to the right shows a situation in which the economy was in equilibrium at potential GDP (at point A) when the demand for housing sharply declined. What actions can Congress and the president take to move the economy back to potential GDP? A.Increase the money supply. B.Increase government spending or decrease taxes. C.Decrease government spending or increase taxes. D.Both A and B using the line drawing tool show the results of these actions on your graph. Label your new line(s). Then using the point drawing tool identify the new equilibrium point and label it C. Show less
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