If the economy is in a recession, it is likely that
A) the aggregate demand curve intersects the inflation adjustment line at a level of real GDP that is higher than potential GDP.
B) aggregate expenditures are unequal to real GDP.
C) the aggregate demand curve and the inflation adjustment line do not intersect.
D) the economy is not in equilibrium and is therefore not on the aggregate demand curve.
E) the aggregate demand curve intersects the inflation adjustment line at a level of real GDP that is less than potential GDP.
Correct Answer:
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Q170: If firms and workers expect prices to
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Q172: Explain what happens to the inflation adjustment
Q173: The inflation adjustment line will shift down
Q174: Historically, there has been a positive correlation
Q176: If real and potential GDP are equal,
Q177: The table below shows the price level
Q178: Explain why the inflation adjustment line is
Q179: According to historical evidence, when real GDP
Q180: The figure below plots real and potential
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