Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Demand and Aggregate Supply at Different Price Levels

-(Exhibit: Aggregate Demand and Aggregate Supply at Different Price Levels) The table shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion. What kind of gap, if any, exists and what is the size of the gap?

A) No gap exists because the economy is in equilibrium.
B) There is a recessionary gap of $0.8 trillion.
C) There is a recessionary gap of $0.2 trillion.
D) There is an inflationary gap of $1 trillion.