Use the graph to answer the following question:
Suppose the economy is in equilibrium at point B which is below the full-employment output of point D. If the government implements fiscal policy targeted at moving real GDP back to point D, but crowding out significantly reduces the effectiveness of the fiscal policy, the equilibrium point will likely end up closer to point
A. A.
B. B.
C. C.
D. D.
Answer: C
Economics
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Why is the U.S. putting less emphasis on multilateral and more emphasis on bilateral trade agreements?
What will be an ideal response?
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