Starting from Long-Run Equilibrium, a Large Increase in Government Purchases

Multiple Choice

Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ______ gap in the short-run and ____ inflation and ____ output in the long-run

A) expansionary; higher; potential
B) expansionary; lower; potential
C) expansionary; higher; higher
D) expansionary; higher; lower