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

Economics

Which round of GATT led to the formation of the WTO?

What will be an ideal response?

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Economics

A point lying to the northeast of the production possibilities frontier is

A) unattainable. B) efficient. C) inefficient. D) profitable.

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Economics

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.