https://gpc.view.usg.edu/content/enforced/306464-CO.710.ECON2105.10584.20141/Imp

Question

https://gpc.view.usg.edu/content/enforced/306464-CO.710.ECON2105.10584.20141/Imported_Resources/chapter 13_1/f120g2_r.jpg?_&d2lSessionVal=GN002ZIbHomaCalxk7fQMiXip Refer to the above figure (URL provided). Suppose the economy is operating at point A. There is a recessionary gap of ________, which can be closed by ________. A.$2 trillion; an increase in government spending of $14 trillion B.$1 trillion; expansionary fiscal policy that shifts the short-run aggregate supply curve through point C C.$2 trillion; expansionary fiscal policy that generates another $2 trillion in total spending D.$3 trillion; increasing government spending by $1 trillion

Explanation / Answer

c because horizontal distance betwenn A and D is 2 trillion and fiscal policy which can cover 2 trillion by generating another 2 trillion

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