Multiple Choice
A recessionary gap occurs when
A) aggregate demand falls, but other things remain constant.
B) short-run aggregate supply falls, but other things remain constant.
C) the short-run equilibrium level of real GDP is greater than the level consistent with the long-run aggregate supply curve.
D) the short-run equilibrium level of real GDP is less than the level consistent with the long-run aggregate supply curve.
Correct Answer:
Verified
Correct Answer:
Verified
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