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Refer to the Graph Shown

Question 201

Multiple Choice

Refer to the graph shown. In the graph, if the price level is P₀ and the aggregate demand curve is AD_0,then the economy is in:

A) a recessionary gap.
B) an inflationary gap.
C) a long-run equilibrium.
D) a short-run equilibrium but not a long-run equilibrium.

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