Multiple Choice
The figure below shows equilibrium in an aggregate demand-aggregate supply model. Which of these statements is true if the economy described by this figure is at point M on SRAS100?
A) The actual price level is lower than expected with a $200 billion expansionary gap.
B) The actual price level is lower than expected with a $200 billion recessionary gap.
C) The actual price level is higher than expected with a $200 billion recessionary gap.
D) The actual price level is higher than expected with a $200 billion expansionary gap.
E) The economy is in equilibrium in the short run and the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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