Multiple Choice
When the macroeconomic equilibrium is such that real GDP exceeds potential real GDP, the economy is suffering from ________ and the government policy to eliminate this gap will ________ real GDP and to ________ the price level.
A) an inflationary gap; increase; increase
B) a recessionary gap; decrease; decrease
C) an inflationary gap; increase; decrease
D) a recessionary gap; increase; decrease
E) an inflationary gap; decrease; decrease
Correct Answer:
Verified
Correct Answer:
Verified
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