Question

If the economy is falling below potential real​ GDP, which of the following would be an appropriate fiscal policy to bring the economy back to​ long-run aggregate​ supply? An increase in.

Answer 1

Government spending

Step-by-step explanation:

Expanded government spending is probably going to cause an ascent in aggregate demand (AD). This can prompt higher development momentarily. It can likewise increase the overall GDP. Higher government spending will likewise affect the supply side of the economy. Likewise, increase in government spending centres to apply fiscal policy is a way which could improve the economic situation of the country, it can also improve efficiency and a development over the long-run.