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Consider the following graph. Suppose the economy is currently at point B. In order to bring the economy back to point A, should the government
Consider the following graph. Suppose the economy is currently at point B. In order to bring the economy back to point A, should the government conduct an expansionary fiscal policy or a contractionary fiscal policy? Price level LRAS SRAS2 SRAS1 B 4 AD 2 AD1 Y* Real GDP (Y) O The government should conduct an expansionary fiscal policy. O The government should conduct a contractionary fiscal policy
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