In Macroland,the Components of Planned Aggregate Expenditure Are Given By

Multiple Choice

In Macroland,the components of planned aggregate expenditure are given by:
C = 100 + 0.9(Y - T) - 500r
I = 150 - 1,000r
G = 200
NX = 50
If potential output equals 3,500,net taxes equal 100,and the central bank sets the interest rate to equal 0.05 (5%) ,then at the short-run equilibrium,there is a(n) _________ gap of ________.

A) expansionary;100
B) expansionary;150
C) recessionary;50
D) recessionary;100
E) recessionary;150