Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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Jamal earns $160,000 per year and Josephina earns $80,000 per year. They both pay the same price to buy the identical automobile and each pays $1,600 in sales tax. In relation to their relative incomes, this is an example of a
A) regressive tax. B) progressive tax. C) proportional tax. D) marginal tax.
Those living in the poorest quartile of countries would like to emigrate because:
A. earnings are higher for the same skill level in richer countries. B. the opportunities to gain more education are higher in richer countries. C. the cost of living is lower in richer countries. D. All of these statements are true.
In 2009, the Nobel Prize in economics was awarded for work on the effectiveness of social norms in the management of commonly held property to:
A. Gary Becker. B. Arthur Pigou. C. Elinor Ostrom. D. Ronald Coase.
All of the following illustrate how government can correct for positive externalities EXCEPT
A. regulation. B. government financing and production. C. charging effluent fees. D. subsidies.