Multiple Choice
If,at the short-run equilibrium,a recessionary gap exists,the
A) IA line will move upward until actual output equals potential output.
B) IA line will move downward until actual output equals potential output.
C) LRAS line will move upward until actual output equals potential output.
D) LRAS line will move downward until actual output equals potential output.
E) LRAS line and IA line will move upward until actual output equals potential output.
Correct Answer:

Verified
Correct Answer:
Verified
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