Exhibit 11-3
-In an economy characterized by Exhibit 11-3,there is a recessionary gap.

Name: Exhibit 11-3 -In an economy characterized by Exhibit 11-3,there is a recessionary gap.
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Question

Exhibit 11-3 
-In an economy characterized by Exhibit 11-3,there is a recessionary gap.

Quizplus · Accepted Answer

In Exhibit 11-3, the equilibrium output (Y*) is below the potential output (Yp), indicating a recessionary gap. Therefore, there is a need for expansionary fiscal or monetary policies to increase aggregate demand and close the output gap.

Exhibit 11-3 -In an Economy Characterized by Exhibit 11-3,there Is a Recessionary