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
Economics
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Indicate whether the statement is true or false
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As the rate of interest on borrowed funds increases, the quantity of investment funds demanded diminishes.
Answer the following statement true (T) or false (F)
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If the price of a good goes up by 5 percent and, in response, the quantity demanded falls by 15 percent, the price elasticity of demand will be:
A. 3. B. 0.3333. C. 0.15. D. .05.
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Refer to the graph shown. When the market is in equilibrium, producer surplus is equal to:
A. 2,000. B. 1,500. C. 500. D. 1,000.
Economics