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 of the following is not constant when balanced growth is obtained?

A) Y/NA B) NA C) K/NA D) all of the above E) none of the above

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Economics

If the cost of apparel increases by 50 percent, then, other things the same, the CPI is likely to increase by about

a. 0.5 percent. b. 1.5 percent. c. 3.0 percent. d. 11.8 percent.

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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.