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Refer to the Accompanying Figure

Question 55

Multiple Choice

Refer to the accompanying figure. Refer to the accompanying figure. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point ________ creating ________ gap. A) D; an expansionary B) B; expansionary C) A; a recessionary D) B; no output Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point ________ creating ________ gap.


A) D; an expansionary
B) B; expansionary
C) A; a recessionary
D) B; no output

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