-The above figure depicts an economy
A) with an inflationary gap.
B) with a recessionary gap.
C) producing at full employment.
D) None of the above answers is correct.

Question

-The above figure depicts an economy
A) with an inflationary gap. 
B) with a recessionary gap. 
C) producing at full employment. 
D) None of the above answers is correct.

Quizplus · Accepted Answer

An inflationary gap occurs when an economy's real GDP is higher than its potential GDP, leading to upward pressure on prices due to high demand outstripping supply.

-The Above Figure Depicts an Economy