Multiple Choice
-Based on the Keynesian cross diagram above,if potential output Y* = 6,000,then at the short-run equilibrium,
A) there is a recessionary gap.
B) there is an expansionary gap.
C) actual output equals potential output.
D) firms will be producing more than they can sell.
E) firms will be producing less than they can sell.
Correct Answer:
Verified
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