Use the Following to Answer Questions

question 42

Multiple Choice

Use the following to answer questions:
-(Figure: AD-AS) Refer to Figure: AD-AS. Suppose the economy is producing the output level Y_p and a negative demand shock shifts the AD₁ curve to AD₃. The economy now has a(n) _____ gap, which can be closed by _____ fiscal policy.

• A) inflationary; expansionary
• B) recessionary; contractionary
• C) recessionary; expansionary
• D) inflationary; contractionary

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Definitions:

Pupil

The opening in the center of the iris of the eye, which regulates the amount of light that enters the eye.

Cornea

The clear, front part of the eye covering the iris and pupil, helping to focus incoming light.

Pupil

The part of the eye located in the center of the iris, which regulates the amount of light that enters the eye.

Iris

The pigment-rich section of the eye responsible for regulating pupil size and controlling the influx of light.