Use the following to answer questions. Exhibit: The Aggregate Demand/Aggregate Supply Model 1 -(Exhibit: The Aggregate Demand/Aggregate Supply Model 1) Which of the following statements is true? A) The economy depicted in the figure experiences a recessionary gap = Y_p-Y₁. B) The economy depicted in the figure experiences a recessionary gap = Y_p-Y₂. C) The economy depicted in the figure experiences a recessionary gap = Y₂-Y₁. D) The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium.

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The recessionary gap is the difference between the potential output (Yp) and the actual output (Y2), indicating the economy is producing below its potential.

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