Refer to the Accompanying Figure

Multiple Choice

Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 16,000, then there is ________, and ________ could return the economy to potential output (Y*) .

A) an expansionary gap; a decrease in autonomous expenditures of 1,000
B) an expansionary gap; a decrease in autonomous expenditures of 4,000
C) a recessionary gap; an increase in autonomous expenditures of 1,000
D) a recessionary gap; an increase in autonomous expenditures of 4,000