-The data in the above table show that when the price level is 120, the economy
A) has an inflationary gap.
B) will have falling money wage rates sometime in the future.
C) has a recessionary gap.
D) is in a long- run macroeconomic equilibrium.

Question

-The data in the above table show that when the price level is 120, the economy
A) has an inflationary gap. 
B) will have falling money wage rates sometime in the future. 
C) has a recessionary gap. 
D) is in a long- run macroeconomic equilibrium.

Quizplus · Accepted Answer

When the price level is 120, the economy has a recessionary gap, indicating that the actual output is less than the potential output, leading to unemployment and underutilized resources.

-The Data in the Above Table Show That When the Price