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Refer to the Accompanying Figure

Question 63

Multiple Choice

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


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

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