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Suppose AD and SRAS Intersect to the Left of LRAS

Question 40

Multiple Choice

Suppose AD and SRAS intersect to the left of LRAS.Which of the following is true?


A) The economy is in a recessionary gap.
B) The economy is in an inflationary gap.
C) The economy is in a long-run equilibrium.
D) This situation is actually impossible.

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