Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions.
Exhibit: Aggregate Demand and Investment 1
-(Exhibit: Aggregate Demand and Investment 1) The economy is in short-run equilibrium. To move the economy to a long-run equilibrium, policy makers should

A) increase interest rates and discourage investment to close the inflationary gap.
B) reduce interest rates and encourage investment to close the recessionary gap.
C) increase interest rates and encourage investment to close the inflationary gap.
D) reduce interest rates and discourage investment to close the recessionary gap.