Multiple Choice
If equilibrium level of real Gross Domestic Product (GDP) is less than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is
A) an aggregate demand shock.
B) an aggregate supply shock.
C) a recessionary gap.
D) an inflationary gap.
Correct Answer:
Verified
Correct Answer:
Verified
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