Suppose the Economy Is at a Point Below Its Physical

Multiple Choice

Suppose the economy is at a point below its physical production possibilities frontier but above its institutional production possibilities frontier.In response to this situation,Keynesian economists may propose that government enact __________ fiscal policy to correct this __________ gap by __________ government expenditures.

A) expansionary; inflationary; increasing
B) contractionary; inflationary; decreasing
C) expansionary; recessionary; increasing
D) contractionary; recessionary; decreasing
E) contractionary; inflationary; increasing