If the Equation for Planned Aggregate Expenditure Is Given by PAE

Multiple Choice

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 10,500,then there is a(n) ________ gap equal to ________ units,so if net exports ________ by ________,the economy will return to potential output.

A) expansionary;500;decrease;200
B) expansionary;50;decrease;20
C) expansionary;6,500;increase;2,600
D) recessionary;500;increase;200
E) recessionary;50;increase;20