In the short-run Keynesian model, to close a recessionary gap of $1 billion dollars government purchases must

Question

In the short-run Keynesian model, to close a recessionary gap of $1 billion dollars government purchases must be:

A. increased by $1 billion.

B. decreased by $1 billion.

C. increased by more than $1 billion.

D. increased by less than $1 billion.

E. decreased by less than $1 billion.

Answer 1

D. increased by less than $1 billion.