The figure below shows the short-run aggregate supply curve of an economy.If P3 is the price level prevailing in the economy,_____.

A)there is an expansionary gap.
B)there is a recessionary gap.
C)the price level will rise.
D)the actual unemployment rate is above the natural rate.
E)potential output is greater than actual output.

Question

The figure below shows the short-run aggregate supply curve of an economy.If P3 is the price level prevailing in the economy,_____.

A)there is an expansionary gap. 
B)there is a recessionary gap. 
C)the price level will rise. 
D)the actual unemployment rate is above the natural rate. 
E)potential output is greater than actual output.

Quizplus · Accepted Answer

The Answer of The figure below shows the short-run aggregate supply curve of an economy.If P3 is the price level prevailing in the economy,_____.

A)there is an expansionary gap. 
B)there is a recessionary gap. 
C)the price level will rise. 
D)the actual unemployment rate is above the natural rate. 
E)potential output is greater than actual output.

The Figure Below Shows the Short-Run Aggregate Supply Curve of an Economy.If