Multiple Choice
The figure below shows the price level, real GDP, and the potential output for an economy. According to those who favor a passive approach to policy, once the expansionary gap is eliminated, the economy will end up at:
A) point A.
B) point B.
C) point C.
D) a point to the right of point A.
E) a point below C.
Correct Answer:
Verified
Correct Answer:
Verified
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