Figure 12-4 -Refer to Figure 12-4. At income level Y 1 , there is a(n)

At income level Y1, a recessionary gap exists, indicating that the economy is producing below its potential output, leading to unemployment and underutilized resources.

Figure 12-4 -Refer to Figure 12-4. At income level Y 1 , there is a(n)

At income level Y1, a recessionary gap exists, indicating that the economy is producing below its potential output, leading to unemployment and underutilized resources.

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Figure 12-4 -Refer to Figure 12-4. at Income Level Y₁, There Is

Question 134

Multiple Choice

Figure 12-4 Figure 12-4 -Refer to Figure 12-4. At income level Y<sub>1</sub>, there is a(n) A) inflationary gap, and expansionary policies may be initiated. B) recessionary gap, and contractionary policies may be initiated. C) recessionary gap. D) recessionary gap, and the Fed is likely to decrease the money supply.
-Refer to Figure 12-4. At income level Y₁, there is a(n)

A) inflationary gap, and expansionary policies may be initiated.
B) recessionary gap, and contractionary policies may be initiated.
C) recessionary gap.
D) recessionary gap, and the Fed is likely to decrease the money supply.

Correct Answer: