The AD-AS model in the diagram above shows that at the initial short-run equilibrium point A,the economy is experiencing ___________ gap.Starting from point A,a decrease in government purchases that shifts the aggregate demand curve from AD to AD' will lead to the long-run equilibrium at point C,thus decreasing output at a ___________ price level and eliminating the output gap.
A) a recessionary;constant
B) an expansionary;constant
C) a recessionary;lower
D) an expansionary;higher
E) an expansionary;lower
Correct Answer:
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