Exhibit 10.7 -Refer to Exhibit 10.7 Which Shows the Equilibrium Price Level

Multiple Choice

Exhibit 10.7

-Refer to Exhibit 10.7 which shows the equilibrium price level and real GDP in an aggregate demand-aggregate supply model. If the economy is at point H, there is a(n) _____

A) expansionary gap of $300 billion.
B) recessionary gap of $300 billion.
C) recessionary gap of $10 billion.
D) expansionary gap of $20 billion.
E) expansionary gap of $10 billion.