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Question 41

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Use the following to answer questions: Use the following to answer questions: -(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. At E<sub>1</sub>, the economy: A) is in a long-run equilibrium. B) has an inflationary gap. C) has a recessionary gap. D) has low unemployment.
-(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. At E1, the economy:


A) is in a long-run equilibrium.
B) has an inflationary gap.
C) has a recessionary gap.
D) has low unemployment.

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