Refer to the Accompanying Figure

question 55

Multiple Choice

Refer to the accompanying figure. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD¹ will lead to a short-run equilibrium at point ________ creating ________ gap.

• A)D; an expansionary
• B)B; expansionary
• C)A; a recessionary
• D)B; no output

---

Definitions:

Generation Z

The cohort of individuals born approximately between the mid-1990s to the early 2010s, known for their fluency in digital technologies and progressive social views.

Traditionalists

Individuals or groups who adhere to long-established customs, beliefs, or methods, often resisting change.

Baby Boomers

Individuals born approximately between 1946 and 1964, often associated with significant economic, political, and social changes in their lifetimes.

Generation X

The demographic cohort following the Baby Boomers and preceding Millennials, typically born between the early 1960s and late 1970s.