The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. FIGURE 24-7 Consider Figure 24-7.At the initial short-run equilibrium,there is ________ output gap of ________.This gap could be closed by a ________.
A)a recessionary; 100; fiscal contraction
B)a recessionary; 200; fiscal expansion
C)an inflationary; 100; fiscal contraction
D)an inflationary; 200; fiscal contraction
E)an inflationary; 350; fiscal expansion

Question

The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A.  FIGURE 24-7 Consider Figure 24-7.At the initial short-run equilibrium,there is ________ output gap of ________.This gap could be closed by a ________.
A)a recessionary; 100; fiscal contraction 
B)a recessionary; 200; fiscal expansion 
C)an inflationary; 100; fiscal contraction 
D)an inflationary; 200; fiscal contraction 
E)an inflationary; 350; fiscal expansion

Quizplus · Accepted Answer

The Answer of The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A.  FIGURE 24-7 Consider Figure 24-7.At the initial short-run equilibrium,there is ________ output gap of ________.This gap could be closed by a ________.
A)a recessionary; 100; fiscal contraction 
B)a recessionary; 200; fiscal expansion 
C)an inflationary; 100; fiscal contraction 
D)an inflationary; 200; fiscal contraction 
E)an inflationary; 350; fiscal expansion

The Diagram Below Shows an AD/AS Model for a Hypothetical