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When the Macroeconomic Equilibrium Is Such That Real GDP Exceeds

Question 68

Multiple Choice

When the macroeconomic equilibrium is such that real GDP exceeds potential real GDP, the economy is suffering from --------------------, and the government policy to eliminate this gap will real GDP and to --------------------the price level.


A) an inflationary gap; increase; decrease
B) a recessionary gap; decrease; decrease
C) an inflationary gap; decrease; decrease
D) a recessionary gap; increase; decrease
E) an inflationary gap; increase; increase

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