Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 

A $300 billion decrease in both government spending and taxes will

A) decrease GDP by less than $300 billion. B) decrease GDP by more than $300 billion. C) not change the level of GDP. D) decrease GDP by $300 billion.

A positively sloped long-run average total cost curve means there are economies of scale

Indicate whether the statement is true or false