FIGURE 24-1 Refer to Figure 24-1. Suppose the economy is currently in a short-run equilibrium with output of Y0. An appropriate fiscal policy response, to attain potential output ( Y), is a reduction in government purchases of goods and services. an increase in corporate income taxes. a decrease in personal income taxes. a decrease in government transfer payments. an increase in interest rates to encourage increased saving..

1. FIGURE 24-1 Refer to Figure 24-1. Suppose the economy is currently in a short-run equilibrium
with output of Y0. An appropriate fiscal policy response, to attain potential output ( Y), is a
reduction in government purchases of goods and services. an increase in corporate income taxes.
a decrease in personal income taxes. a decrease in government transfer payments. an increase in
interest rates to encourage increased saving.