-Refer to Figure 5.5. At the equilibrium level of price and real GDP this economy:
A) faces a recessionary gap.
B) has output is too high relative to its potential.
C) faces an inflationary gap.
D) is likely to experience significant inflation.

Question

-Refer to Figure 5.5. At the equilibrium level of price and real GDP this economy:
A) faces a recessionary gap. 
B) has output is too high relative to its potential. 
C) faces an inflationary gap. 
D) is likely to experience significant inflation.

Quizplus · Accepted Answer

The Answer of 
-Refer to Figure 5.5. At the equilibrium level of price and real GDP this economy:
A) faces a recessionary gap. 
B) has output is too high relative to its potential. 
C) faces an inflationary gap. 
D) is likely to experience significant inflation.