An Economy Characterized by the AD Equation P = 220

An economy characterized by the AD equation P = 220 - 0.02Y,SRAS equation P = 100,and LRAS equation Y* = 7,000 has a recessionary gap equal to ___________.In an attempt to eliminate this recessionary gap,the policy authorities engineer a shift in the AD curve to the position P = 230 - 0.02Y.It may be concluded that the policy will ___________ in achieving its goal because the authorities have ___________ the size of recessionary gap.

A) 1,000;succeed;correctly guessed
B) 1,000;fail;underestimated
C) 1,200;fail;overestimated
D) 1,500;fail;underestimated
E) 1,000;fail;overestimated