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Question 50

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Use the following to answer questions: Use the following to answer questions: -(Figure: AD-AS) Refer to Figure: AD-AS. Consider an economy that is producing an output level of Y<sub>1</sub>. The economy has a(n) _____ gap, which can be closed by _____ fiscal policy. A) recessionary; expansionary B) inflationary; contractionary C) inflationary; expansionary D) recessionary; contractionary
-(Figure: AD-AS) Refer to Figure: AD-AS. Consider an economy that is producing an output level of Y1. The economy has a(n) _____ gap, which can be closed by _____ fiscal policy.


A) recessionary; expansionary
B) inflationary; contractionary
C) inflationary; expansionary
D) recessionary; contractionary

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