Which of the following fiscal policies would be most likely to return the economy to the natural rate of outpu

Question

Which of the following fiscal policies would be most likely to return the economy to the natural rate of output of $6 trillion?

A. A reduction in military spending

B. A decrease in the money supply

C. An increase in the spending multiplier

D. A decrease in sales taxes

Answer 1

C. An increase in the spending multiplier