-Based on the Diagram Above,starting from a Long-Run Equilibrium at Point

Multiple Choice

-Based on the diagram above,starting from a long-run equilibrium at point C,an increase in government spending that increases aggregate demand from ADI to ADI¹ will lead to a short-run equilibrium at point ________,creating _________ gap.

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