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Refer to the Graph Shown

Question 44

Multiple Choice

Refer to the graph shown. In the graph, if the price level is P1 and the aggregate demand curve is AD0 then the economy is: Refer to the graph shown. In the graph, if the price level is P<sub>1</sub> and the aggregate demand curve is AD<sub>0 </sub>then the economy is: A) in a recessionary gap. B) in an inflationary gap. C) in a long-run equilibrium. D) fully employed.


A) in a recessionary gap.
B) in an inflationary gap.
C) in a long-run equilibrium.
D) fully employed.

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