Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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Assume that the labor market is perfectly competitive. An increase in the productivity of labor
A) causes the marginal factor cost of labor to decrease. B) generates a lower wage rate. C) causes an increase in the demand for labor. D) causes a reduction in the demand for labor since each worker is now more productive.
Which of the following is likely to result in a lower equilibrium price? a. An increase in both demand and supply
b. A decrease in both demand and supply. c. An increase in demand and a decrease in supply. d. A decrease in demand and an increase in supply.
Which of the following provides the best example of a public good?
a. elementary and secondary education b. residential trash pickups provided by a local government c. an unscrambled television signal d. the medical services provided by a local hospital
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.