Multiple Choice
Exhibit 10.4
-Refer to Exhibit 10.4, which shows an aggregate demand-aggregate supply model. Which of these statements is true if the economy 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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