Figure 13-5 Shows the Short-Run Macroeconomic Equilibrium of an Economy

Multiple Choice

Figure 13-5 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that:Figure 13-5

A) the real value of currency in the economy is lower than its nominal value.
B) the economy is operating with a recessionary gap.
C) the economy is operating at long-run equilibrium.
D) the government should increase the level of taxes in the economy.
E) the government should decrease its budget.