Refer to the Information Provided in Figure 26

Multiple Choice

Refer to the information provided in Figure 26.8 below to answer the question(s) that follow. Figure 26.8
-Refer to Figure 26.8. Suppose the economy is currently at Point A producing potential output Y₀. If the government decreases spending, the economy moves to Point ________ in the short run and to Point ________ in the long run.

A) D; E
B) B; C
C) C; B
D) B; D