Refer to the graph shown.In the graph, if the price level is P0 and the aggregate demand curve is AD0, then the economy is in: 
A) a recessionary gap.
B) an inflationary gap.
C) a long-run equilibrium.
D) a short-run equilibrium but not a long-run equilibrium.
Correct Answer:
Verified
Q122: Refer to the graph shown.If the economy
Q123: Refer to the graph shown.If the price
Q124: A recessionary gap exists when:
A)aggregate demand exceeds
Q126: If potential output exceeds actual output, the
Q128: If potential output is less than actual
Q129: Refer to the graph shown.If the price
Q137: An inflationary gap exists when:
A)aggregate demand exceeds
Q138: If actual output exceeds potential output, the
Q139: At points on the short-run aggregate supply
Q140: If actual output exceeds potential output, eventually:
A)input
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