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

Economics

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Suppose market demand is Q = 1000 - 4p. If all firms have LRAC = 50 - 5q + q2, how many identical firms will there be when this industry is in long-run equilibrium?

What will be an ideal response?

Economics

Higher inflation

a. causes firms to change prices less frequently and makes relative prices less variable. b. causes firms to change prices less frequently and makes relative prices more variable. c. causes firms to change prices more frequently and makes relative prices less variable. d. causes firms to change prices more frequently and makes relative prices more variable.

Economics

Which of the following helps explain the problem of disappearing political discourse?

A. Moral hazard B. The lemons model C. Statistical discrimination D. Adverse selection

Economics

The development of complex algorithms that perform "brain work" in the future is likely to:

A. increase the number of jobs requiring little thought. B. higher income equality. C. increase overall employment. D. lengthen the overall workweek.

Economics