A recessionary gap
The given graph has short-run equilibrium (SRAS=AD) at the left of
the LRAS means the potential output is higher than the actual
output, so the economy is in a recessionary gap.
Expansionary fiscal policy is used to get it at full employment
level. It increases government spending or decreases taxes to
increase aggregate demand(AD). It shifts AD to the right and
increases price level and the actual output.