Refer to the Accompanying Figure

question 22

Multiple Choice

Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 16,000, then there is ________, and ________ could return the economy to potential output (Y*) .

• A)an expansionary gap; a decrease in autonomous expenditures of 1,000
• B)an expansionary gap; a decrease in autonomous expenditures of 4,000
• C)a recessionary gap; an increase in autonomous expenditures of 1,000
• D)a recessionary gap; an increase in autonomous expenditures of 4,000

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