Question: Use the following graph to answer the next question. If the economy is currently in equilibrium at output level Y2, but full-employment output is at

Use the following graph to answer the next question. If the economy is currently in equilibrium at output level Y2, but full-employment output is at level Y1, which of the following fiscal policy actions would be the most effective at bringing the economy back to its full-employment output level? Multiple Choice Increase taxes and increase government purchases. Cut taxes. Increase taxes. Reduce government purchases and cut taxes

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