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The Figure Below Shows Equilibrium in an Aggregate Demand-Aggregate Supply

Question 74

Multiple Choice

The figure below shows equilibrium in an aggregate demand-aggregate supply model. Which of these situations will be experienced by the economy as it moves from point e to point e'?
The figure below shows equilibrium in an aggregate demand-aggregate supply model. Which of these situations will be experienced by the economy as it moves from point e to point e'? A) An expansionary gap B) A decline in potential GDP C) Overutilization of resources D) Deflation E) Cost-push inflation


A) An expansionary gap
B) A decline in potential GDP
C) Overutilization of resources
D) Deflation
E) Cost-push inflation

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