A) Government expenditures are increased by the amount of the GDP gap.
B) Government expenditures are increased by the amount of the AD shortfall.
C) Aggregate demand is increased by the amount of the GDP gap.
D) Government expenditures are increased by the amount of the AD shortfall divided by the multiplier.
ANSWER:
D) Government expenditures are increased by the amount of the AD shortfall divided by the multiplier.