Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
Figure: Fiscal Policy Options
-(Figure: Fiscal Policy Options) Look at the figure Fiscal Policy Options. If the aggregate demand curve is AD':

A) a contractionary fiscal policy may be warranted.
B) an expansionary fiscal policy may be warranted.
C) the economy is in long-run equilibrium.
D) the economy is experiencing an inflationary gap.