The graph below shows an economy in macroeconomic equilibrium. Suppose business taxes are increased by the government. All else equal, illustrate the effect of this contractionary fiscal policy on macroeconomic equilibrium. Provide your answer below: x y a2 ab 7 8 9 ( ) < > 4 5 6 |a| , 1 2 3 0 . = + RESET FEEDBACK Content attribution- Opens a dialog QUESTION 51 POINT Which of the following fiscal policy measures can reduce inflation in an inflationary gap? Select the correct answer below: decrease the interest rate decrease in government spending decrease corporate tax rates increase transfer payments