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Refer to the Diagram

Question 36

Multiple Choice

Refer to the diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE1, the: Refer to the diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE<sub>1</sub>, the: A) inflationary expenditure gap is hg. B) recessionary expenditure gap is BC. C) inflationary expenditure gap is zero. D) inflationary expenditure gap is ed.


A) inflationary expenditure gap is hg.
B) recessionary expenditure gap is BC.
C) inflationary expenditure gap is zero.
D) inflationary expenditure gap is ed.

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