Multiple Choice
Suppose an economy has an upward-sloping AS curve and an inflationary gap equal to $10 billion.If AD shifts to the left by $10 billion,
A) Real output will fall by less than $10 billion.
B) Real output will fall by $10 billion.
C) The inflationary gap will be eliminated.
D) A recessionary gap will be created.
Correct Answer:
Verified
Correct Answer:
Verified
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