Refer to the Accompanying Figure

Multiple Choice

Refer to the accompanying figure. An economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing and the long-run equilibrium would be at point ________.

A) recessionary; B; C
B) recessionary; C; B
C) expansionary; C; B
D) expansionary; B; C