If planned aggregate expenditure equals 5,000 + 0.55Y and potential output (Y*) equals 10,000,then this economy has a(n) __________ gap that can be closed by _________.
A) expansionary;decreasing taxes
B) expansionary;increasing transfer payments
C) expansionary;decreasing government purchases
D) recessionary;increasing government purchases
E) recessionary;increasing taxes
Correct Answer:
Verified
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