FIGURE 24-1 -Refer to Figure 24-1.If the Economy Is Currently Producing Output

Multiple Choice

FIGURE 24-1
-Refer to Figure 24-1.If the economy is currently producing output of Y₀ and the government initiates an expansionary fiscal policy adequate to close the output gap,the result is intended to be

A) the vertical line at Y^* will shift to the left,intersecting the AS and AD curves at Y₀.
B) no change in either price level or output,since expansionary fiscal policy is ineffective.
C) that the AS curve will shift to the right until point A is reached.
D) that the AS curve and the AD curve will shift left simultaneously.
E) that the AD curve will shift to the right until point B is reached.