Initially in long run macroeconomic equilibrium

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Suppose that the U.S. economy is initially in Long Run Macroeconomic Equilibrium. An increase in the corporate income tax rate will lead the U.S. ____ curve to shift and create a(n) ____.

A. Short Run Aggregate Supply; recessionary gap

B. Short Run Aggregate Supply; expansionary gap

C. Aggregate Demand; recessionary gap

D. Aggregate Demand; expansionary gap

Reference no: EM13898505

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