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Suppose a wave of investor and consumer optimism has increased spending so that the current level of output exceeds the long-run natural rate. If policy
Suppose a wave of investor and consumer optimism has increased spending so that the current level of output exceeds the long-run natural rate. If policy makers choose to engage in activist stabilization policy, they should
- decrease taxes, which shifts the aggregate demand curve to the right.
- decrease government spending, which shifts the aggregate demand curve to the right.
- decrease taxes, which shifts the aggregate demand curve to the left.
- decrease government spending, which the shifts the aggregate demand curve to the left.
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