-Refer to Exhibit 15-6.At Q₁,this economy is in a(n) ___________________ gap.An economist who believes that the economy is self-regulating would assert that the ________________ curve will shift rightward to push the economy to point _____________.

Question

-Refer to Exhibit 15-6.At Q<sub>1</sub>,this economy is in a(n) ___________________ gap.An economist who believes that the economy is self-regulating would assert that the ________________ curve will shift rightward to push the economy to point _____________. A) inflationary; SRAS; A B) recessionary; SRAS; A C) inflationary; AD; B D) recessionary; AD; B

Quizplus · Accepted Answer

At Q₁, the economy is producing at a level below its potential output, indicating a recessionary gap. An economist who believes in the self-regulating nature of the economy would expect the Short-Run Aggregate Supply (SRAS) curve to shift rightward, moving the economy back to its long-term equilibrium at point A, where the economy is at its potential output.