FIGURE 22-5 Refer to Figure 22-5

Multiple Choice

FIGURE 22-5 Refer to Figure 22-5.Diagram 2 illustrates an economy that is experiencing a(n) ________ gap.The goal of stabilization policy would be to ________ national income until it is equal to ________.

A) recessionary; increase; actual national income
B) inflationary; reduce; potential GDP
C) inflationary; reduce; actual national income
D) inflationary; increase; potential GDP
E) recessionary; increase; potential GDP