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
You might also like to view...
If the number of employed people in a country is 21 million, and the number of unemployed workers in a country is 10 million. The size of the labor force in the country is equal to ________
A) 31 million B) 21 million C) 11 million D) 10 million Consider an economy that consists of the following economic agents only. 2 million full-time workers 1 million part-time workers 1 million people who have been laid off by their employers but are currently looking for employment 1 million children of age fifteen years or less 2 million housewives not looking for jobs
The financial burden entailed in the paying of a tax is known as the
a. incidence of the tax. b. impact of the tax. c. effect of the tax. d. shift of the tax.
Which of the following is a fixed cost?
a. electricity b. worker bonuses c. mortgage on the building d. steel to produce refrigerators
The M1 money supply is composed of:
A. checkable deposits and currency. B. savings deposits and time deposits. C. money market mutual funds held by businesses. D. money market mutual funds held by individuals.