The diagram illustrates an economy in equilibrium with real output at Y and the price level at P. The government wants to increase real output from Y to full employment ($Y_{FE}$) while preventing any rise in the price level in the long run. Which change in fiscal policy is most likely to achieve this objective?
- Adecreasing the rate of income tax
- Bdecreasing spending on education
- Cincreasing the level of sales tax
- Dincreasing welfare benefit payments