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

Multiple Choice

In Econland,the components of planned aggregate expenditure are given by:
C = 500 + 0.75(Y - T) - 500r
I = 300 - 500r
G = 400
NX = 30
If potential output equals 4,520,net taxes equal 40 and the central bank sets the interest rate at 0.05 (5%) ,then at the short-run equilibrium,there is a(n) _______ gap of _______.

A) expansionary;40
B) expansionary;80
C) recessionary;100
D) recessionary;80
E) recessionary;40