The AD-AS Model in the Diagram Below Shows That,in the Initial

Multiple Choice

The AD-AS model in the diagram below shows that,in the initial short-run equilibrium point D,the economy is experiencing ___________ gap.Starting from point D,an income tax increase that shifts the aggregate demand curve from AD to AD' will lead to a new short-run equilibrium at point ___________.In this case,the tax hike,instead of eliminating the initial expansionary gap has,in fact,created ___________ gap.The tax authorities,in this case,have ___________ the size of the initial output gap.

A) a recessionary;A;a recessionary;overestimated
B) an expansionary;A;a recessionary;underestimated
C) a recessionary;B;a recessionary;underestimated
D) an expansionary;B;a recessionary;overestimated
E) a recessionary;C;an expansionary;overestimated