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Exhibit 11-6 Aggregate Demand and Supply Model in Exhibit

Question 175

Multiple Choice

Exhibit 11-6 Aggregate demand and supply model In Exhibit 11-6, if the aggregate demand curve is at AD₃, the government should:

A) raise taxes to move to AD₁.
B) cut taxes to move to AD₂.
C) cut taxes to move to AD₁.
D) cut spending to move to AD₂.
E) not change its behavior.

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