Multiple Choice
Refer to Figure 10.3.If full-employment GDP is $500 billion and the economy is on AD0,
A) An inflationary gap exists,and AD must decrease by less than $100 billion to eliminate it.
B) A recessionary gap exists,and AD must increase by more than $100 billion to eliminate it.
C) An inflationary gap exists,and AD must increase by $100 billion to eliminate it.
D) An inflationary gap exists,and AD must decrease by more than $100 billion to eliminate it.
Correct Answer:
Verified
Correct Answer:
Verified
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