How might expansionary fiscal policy interact with the dynamic AD-AS model to influence economic outcomes?

• A. It has no effect on aggregate demand or supply.
• B. It shifts the long-run aggregate supply curve to the left, decreasing GDP.
• C. It shifts the aggregate demand curve to the left, decreasing GDP.
• D. It shifts the aggregate demand curve to the right, increasing GDP and potentially increasing price levels.

Answer: (D)