Multiple Choice
-In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. An inflationary gap exists
A) if the long-run aggregate supply curve is LAS3.
B) if the long-run aggregate supply curve is LAS2.
C) if the long-run aggregate supply curve is LAS1.
D) All of the above answers are correct.
Correct Answer:
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