A figure has a positive horizontal axis labelled Real G D P (trillions of 2007 dollars) and a positive vertical axis labelled Price Level (C P I). A vertical line labelled L R A S 1 is at horizontal coordinate 1.7. A line labelled A D 1, falling from left to right, and a line labelled S R A S 1, rising from left to right, intersect each other and L R A S 1 at point A, at (1.7, 100). A vertical line labelled L R A S 2 is to the right of L R A S 1 at horizontal coordinate 1.9. A line labelled A D 2, falling from left to right, is parallel to and above and to the right of A D 1. A line labelled S R A S 2, rising from left to right, is parallel to and below and to the right of S R A S 1. S R A S 2 intersects A D 2 at point B at (1.94, 104), which is above and to the right of point A and to the right of L R A S 2. Refer to Figure 12.6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the federal government would most likely Question 1Select one: A. raise interest rates. B. increase oil prices. C. increase the money supply and decrease the interest rate. D. increase government spending. E. increase taxes.