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.

An expansionary fiscal policy is likely to

A) increase borrowing by the Treasury through the sale of bonds. B) decrease borrowing by the Treasury through the purchase of bonds. C) increase borrowing by the Treasury through the purchase of bonds. D) decrease borrowing by the Treasury through the sale of bonds.

Corporations account for

A) the largest proportion of business revenues generated in the United States. B) the largest amount of taxes paid to the U.S. government. C) the largest number of firms in the United States. D) the smallest amount of revenues in the United States.