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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Which of the following statements is TRUE?
A) A Cobb-Douglas production function can have different returns to scale at different output levels. B) It is impossible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. C) It is possible to have increasing returns to scale for one output level, and decreasing returns to scale for a different output level. D) None of the above.
Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?
In the poorest nations, agriculture is likely to contribute as much as ________ percent to total output.
A. 55 B. 10 C. 30 D. 85
The figure shows the saving schedules for economies 1, 2, 3, and 4. Which economy has the largest multiplier?
A. 1.
B. 2.
C. 3.
D. 4.