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    Macroeconomics Study Set 49
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    Exam 26: The Keynesian Short-Run Policy Model: Demand-Side Policies
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    Refer to the Graph Shown
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Refer to the Graph Shown

Question 101

Question 101

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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