Using the attached Aggregate Expenditure model, the current equilibrium is point A) (A/B/C/D). This depicts an economy experiencing a/n A (inflationary/recessionary) gap. The point that represents a level of aggregate expenditure in excess of total production is point: A (A/B/C/D). If the government were to use fiscal policy to improve this economy, they would A (increase/decrease) taxes on firms and households. This would move the economy to a new equilibrium at point:.