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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Supply-side economics
A) promotes increasing taxes to create additional revenue for government spending. B) promotes expansionary fiscal policy by increasing government spending. C) is based on the Ricardian equivalence theorem. D) promotes reducing taxes to create incentives to increase productivity.
The incentives for oligopolists to cheat on collusive agreements are strongest during periods of increasing industry sales
a. True b. False
Mattress savings are: a. used to buy bonds and shares
b. kept in a current account. c. kept in a savings account. d. kept on hand and not loaned out or invested.
Which of the following is correct?
a. A period of hyperinflation is a period of extraordinarily low inflation. b. A period of deflation is any period during which the inflation rate is decreasing. c. In the 1970s, U.S. inflation averaged about 7.8 percent per year d. All of the above are correct.