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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The price of a gallon of gasoline was $1.35 in 2000 when the CPI equaled 1.68. The cost of a gallon of gasoline was $2.38 in 2016 when the CPI equaled 2.40. The real cost of a gallon of gasoline between 2000 and 2016:
A. decreased. B. may have either increased or decreased. C. remained constant. D. increased.
If the Fed wishes to slow economic activity, it might actively pursue:
A. contractionary fiscal policy. B. expansionary monetary policy. C. expansionary fiscal policy. D. contractionary monetary policy.
Why are U.S. banks prohibited from owning stocks?
What will be an ideal response?
Based on the expectations-augmented Phillips curve, if the natural rate of unemployment is 0.06, and if the actual inflation rate exceeds the expected inflation rate, then the unemployment rate is
A. 0.06 plus 0.5 times the difference between actual and expected inflation. B. less than 0.06. C. 0.06. D. more than 0.06.