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If the Short- Run Macroeconomic Equilibrium Occurs with Real GDP

Question 3

Multiple Choice

If the short- run macroeconomic equilibrium occurs with real GDP less than Y*, the economy is


A) experiencing an inflationary gap.
B) at its full- employment level of output.
C) experiencing a recessionary gap.
D) operating at full capacity.
E) threatened with an acceleration of inflation.

Correct Answer:

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