Multiple Choice

-Refer to Exhibit 9-4.Assuming the economy is in an inflationary gap at a short-run equilibrium point with the price level at P2,the movement toward long-run equilibrium will be
A) down and along AD1.
B) up and along AD2.
C) down and along SRAS1.
D) up and along SRAS2.
E) down and along SRAS2.
Correct Answer:
Verified
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