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Starting from a Situation of Full Employment, an Increase in Aggregate

Question 84

Multiple Choice

Starting from a situation of full employment, an increase in aggregate demand creates ________ and ________ the price level.


A) a recessionary gap; lowers
B) a recessionary gap; raises
C) a recessionary gap; does not change
D) an inflationary gap; raises
E) an inflationary gap; lowers

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