If an output gap exists in the short-run, then over time:
A) AS line will move upward or downward until actual output equals potential output.
B) AD line will move left or right until actual output equals potential output.
C) LAS line will move left or right until actual output equals potential output.
D) LAS line will move upward or downward until actual output equals potential output.
Correct Answer:
Verified
Q56: When there is an inflationary gap:
A) upward
Q57: If a short-run equilibrium with a recessionary
Q58: Q59: Q60: Which of the following statements is false? Q62: The long-run adjustments that eliminate recessionary and Q63: The built-in long-run adjustment process that eliminates Q64: When an AD shock raises equilibrium output Q65: The long-run self-correcting mechanism that eliminates an Q66: Suppose the economy is initially at full-employment
A)
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