Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary
B. B; no output
C. B; expansionary
D. A; a recessionary
Answer: A
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Capital accumulation definitely
A) has no impact on the production possibilities frontier. B) shifts the production possibilities frontier inward. C) makes the production possibilities frontier steeper. D) shifts the production possibilities frontier outward.
Consider leaf burning that generates negative externalities. The private cost is
a. less than the external cost b. greater than social benefit c. understated by the amount of the social cost d. less than the social cost e. shared with third parties
The primary focus of the open-economy macroeconomic model is the determination of GDP and the price level
a. True b. False Indicate whether the statement is true or false
Responses to Changes in Demand Conditions: Interest-rate volatility:
What will be an ideal response?