Multiple Choice
Suppose that the economy is initially in a long- run macroeconomic equilibrium. A shock then hits the economy and we observe that the unemployment rate decreases and the price level increases. We can conclude that has increased and there is now a(n) _ gap.
A) aggregate demand; recessionary
B) aggregate supply; recessionary
C) aggregate demand; inflationary
D) aggregate supply; inflationary
Correct Answer:
Verified
Correct Answer:
Verified
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