-Refer to the Above Graph to Answer This Question

Multiple Choice

-Refer to the above graph to answer this question.What are the implications if the price level is currently P1?

A) There is a surplus of goods and services and there is a recessionary gap.
B) There is a shortage of goods and services and there is a recessionary gap.
C) There is a surplus of goods and services and there is an inflationary gap.
D) There is a shortage of goods and services and there is an inflationary gap.