Multiple Choice
An economy is characterized by the AD equation P = 210 - 0.02Y,SRAS equation P = 100 and LRAS equation Y* = 5,000.According to the AD-AS model,this economy currently has a(n) ___________ gap of size ___________.In the absence of any change in government policy,the long-run equilibrium price level in this economy will be ___________ and the output level will be 5000.
A) recessionary;500;110
B) expansionary;500;110
C) recessionary;500;120
D) expansionary;450;110
E) recessionary;450;120
Correct Answer:
Verified
Correct Answer:
Verified
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