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Refer to Figure 10

Question 106

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Refer to Figure 10.3.If full-employment GDP is $600 billion and the economy is on AD<sub>1</sub>, A) A recessionary gap exists,and AD must increase by less than $100 billion to eliminate it. B) A recessionary gap exists,and AD must increase by more than $100 billion to eliminate it. C) An inflationary gap exists,and AD must increase by $100 billion to eliminate it. D) An inflationary gap exists,and AD must increase by more than $100 billion to eliminate it. Refer to Figure 10.3.If full-employment GDP is $600 billion and the economy is on AD1,


A) A recessionary gap exists,and AD must increase by less than $100 billion to eliminate it.
B) A recessionary gap exists,and AD must increase by more than $100 billion to eliminate it.
C) An inflationary gap exists,and AD must increase by $100 billion to eliminate it.
D) An inflationary gap exists,and AD must increase by more than $100 billion to eliminate it.

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