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-Based on the Diagram Above,starting from a Long-Run Equilibrium at Point

Question 134

Multiple Choice

  -Based on the diagram above,starting from a long-run equilibrium at point C,a decrease in government spending that decreases aggregate demand from ADI<sup>1</sup> to ADI will lead to a short-run equilibrium at ________,creating _________ gap. A)  D;an expansionary B)  D;a recessionary C)  D;no output D)  B;an expansionary E)  B;a recessionary
-Based on the diagram above,starting from a long-run equilibrium at point C,a decrease in government spending that decreases aggregate demand from ADI1 to ADI will lead to a short-run equilibrium at ________,creating _________ gap.


A) D;an expansionary
B) D;a recessionary
C) D;no output
D) B;an expansionary
E) B;a recessionary

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