An inflationary gap can be closed by an increase in government spending

Which of the following programs is most clearly advantageous to those with lower levels of income?

a. farm subsidy programs b. the Social Security retirement program c. the Earned Income Tax Credit d. credit subsidies provided by the Import-Export bank to business firms that sell goods abroad

Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2Refer to Figure 32.2. According to ________, a(n) ________ fiscal policy in the long run and after all the adjustments have been made increases price level above P1, but does not change equilibrium output.

A. the new classicals; contractionary B. monetarists; expansionary C. Keynes; contractionary D. Keynes; expansionary