Figure 13-3 Shows the Short-Run Macroeconomic Equilibrium of an Economy

Multiple Choice

Figure 13-3 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that:Figure 13-3

A) the economy is operating with an inflationary gap.
B) the economy is operating with a recessionary gap.
C) the economy is operating at long-run equilibrium.
D) tax rates are falling in the economy.
E) the government should increase its spending in the economy.