a. If the economy is currently operating at the level identified by the AE1 curve, government fiscal policy multiple choice 1 could eliminate this gap by decreasing taxes or increasing expenditures, which will shift the aggregate expenditures schedule up to AE0. could not eliminate this gap. could eliminate this gap by increasing taxes or decreasing expenditures, which will shift the aggregate expenditures schedule up to AE0. could eliminate this recessionary gap by decreasing taxes or decreasing expenditures, which will shift the aggregate expenditures schedule up to AE1