Refer to the above figure. Suppose the U.S. economy is currently operating at point C. Which of the following actions would you recommend to the president of the United States?
A) Reduce taxes to stimulate investment, consumption and net exports. B) Increase government spending while holding taxes constant. C) Engage in contractionary fiscal policy by reducing government spending.
D) Reduce the interest rate to stimulate investment minimizing the crowding out effect.