Use the following information to answer the next question.C = A + .75(Y - T)A = $900I = $600G = $400T = $400NX = -$200Suppose the equilibrium level of real GDP is represents full employment. What would be the effect of a tax decrease of $100?
A. There will be an inflationary expenditure gap of $75.
B. There will be an inflationary expenditure gap of $100.
C. There will be a recessionary expenditure gap of $75.
D. There will be a recessionary expenditure gap of $100.
Answer: A
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