Multiple Choice
The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. 
FIGURE 24-6 Refer to Figure 24-6.In the initial short-run equilibrium,there is ________ output gap of ________,but this gap could be closed by a ________.
A) a recessionary; 100; fiscal contraction
B) a recessionary; 200; fiscal expansion
C) a recessionary; 200; fiscal contraction
D) an inflationary; 100; fiscal contraction
E) an inflationary; 200; fiscal expansion
Correct Answer:
Verified
Correct Answer:
Verified
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