Figure 7-5 -Refer to Figure 7-5. Which of the Following Statements Is

Multiple Choice

Figure 7-5
-Refer to Figure 7-5. Which of the following statements is true?

A) The economy depicted in the figure experiences an inflationary gap = Y₂ *Y_p.
B) The economy depicted in the figure experiences an inflationary gap = Y₁ *Y_p.
C) The economy depicted in the figure experiences an inflationary gap = Y₁*Y₂.
D) The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium.