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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If the United States' maximum possible output of any one good is produced, given the output of other goods, we have attained ____________.
Fill in the blank(s) with the appropriate word(s).
A cost that has already been made and cannot be recovered is called a
A) variable cost. B) fixed cost. C) sunk cost. D) marginal cost.
Kuznets's investigations of development suggested that income
a. generally becomes more unequal as development progresses b. generally becomes more unequal up to a point, then becomes more equal c. generally becomes more equal as development progresses d. generally become more equal up to a point, then become more unequal e. none of the above
You lose your job and as a result your demand for steak falls. This implies that you consider steaks to be a
a. Complementary good b. Normal good c. Inferior good d. Substitute good