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Suppose That the Economy Is in Long-Run Macroeconomic Equilibrium and Aggregate

Question 181

Multiple Choice

Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases. As the economy moves to short-run macroeconomic equilibrium, there is a(n) _____ gap with _____.


A) recessionary; high inflation
B) recessionary; low inflation
C) inflationary; high unemployment
D) inflationary; low unemployment

Correct Answer:

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