Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions .
Exhibit: Fiscal Policy 2
-(Exhibit: Fiscal Policy 2) If discretionary fiscal policy is used to eliminate the gap, policy actions will

A) shift the aggregate demand curve to the left until long-run equilibrium is restored at a price level, P_j and output level, Y_p.
B) shift the aggregate demand curve and the short-run aggregate supply curve to the left until long-run equilibrium is restored at a price level P_k and output level, Y_p.
C) shift the aggregate demand curve to the left until long-run equilibrium is restored at a price level, P_r and output level, Y_p.
D) shift the short-run aggregate supply curve to the left until long-run equilibrium is restored at a price level, P_r and output level, Y_p.