Figure 17-8

-In Figure 17-8, which of the following movements reflects the closing of an inflationary gap through the economy's automatic adjustment mechanism?

Question

Figure 17-8
 
-In Figure 17-8, which of the following movements reflects the closing of an inflationary gap through the economy's automatic adjustment mechanism?

Quizplus · Accepted Answer

The correct answer is A because it shows a movement from a point of excess demand (A) to a point of equilibrium (B), which is what happens when an inflationary gap is closed through the economy's automatic adjustment mechanism.

Figure 17-8 -In Figure 17-8, Which of the Following Movements Reflects the Following