Refer to the Graph $P _ { 1 }$ And Output Level

Multiple Choice

Refer to the graph. Assume that the economy is in a recession with a price level of $P _ { 1 }$ and output level
$Q _ { 1 }$ . The government then adopts an appropriate discretionary ?scal policy. What will be the most likely
New equilibrium price level and output?

A) $P _ { 2 } \text { and } Q _ { 4 }$
B) $P _ { 1 } \text { and } Q _ { 1 }$
C) $P _ { 2 } \text { and } Q _ { 2 }$
D) $P _ { 1 } \text { and } Q _ { 3 }$