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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a. True b. False Indicate whether the statement is true or false
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A. It is established by legislation. B. Free riders are excluded. C. Users collectively consume benefits. D. It is determined by positive economics.
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Answer the following statement true (T) or false (F)
What are the functions for MC and AC if TC = 40 + 10q + 5q2?
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