Refer to the following figure when answering
Figure 9.1: Output versus Time

-Consider Figure 9.1. The dashed line is potential output and the solid line is current output; therefore:
A) areas a and b are booms
B) area b represents an economic boom, and area a is a recession
C) the economy is in neither a recession nor a boom in areas a and b
D) area a represents an economic boom, and area b is a recession
E) areas a and b are expansions

Question

Refer to the following figure when answering  
Figure 9.1: Output versus Time

-Consider Figure 9.1. The dashed line is potential output and the solid line is current output; therefore:
A) areas a and b are booms 
B) area b represents an economic boom, and area a is a recession 
C) the economy is in neither a recession nor a boom in areas a and b 
D) area a represents an economic boom, and area b is a recession 
E) areas a and b are expansions

Quizplus · Accepted Answer

The solid line represents current output, which is below potential output in area a, indicating a boom. The solid line is above potential output in area b, indicating a recession.

Refer to the Following Figure When Answering