The diagram shows an economy at full employment equilibrium.
Which short-run measures should the government take to maintain the economy’s current equilibrium if there is an unexpected balance of trade surplus?
1 )
higher government spending on education financed by an equal rise in direct taxation
higher direct taxation with government spending unchanged to create a budget surplus
3 )
higher spending on infrastructure financed by a budget deficit
4 )
lower interest rates to promote investment spending in the private sector
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