Question: According to the AD-AS model, if the current level of real GDP lies below potential GDP, then an appropriate fiscal policy would be to which

According to the AD-AS model, if the current level of real GDP lies below potential GDP, then an appropriate fiscal policy would be to which will shift the curve to the

A) increase government purchases; AD; left.

B) increase transfer payments; AS; right.

C) increase tax rates; AD; right.

D) increase government purchases; AD; right.

E) cut interest rates; AD; right

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