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Based on the Figure Below

Question 151

Multiple Choice

Based on the figure below. 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. Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD<sup>1 </sup>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


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

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