Table 7-1 Table 7-1 Shows the Aggregate Demand and Short-Run

question 142

Multiple Choice

Table 7-1
Table 7-1 shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion.
-Refer to Table 7-1. What kind of gap, if any, exists and what is the size of the gap?

• A) No gap exists because the economy is in equilibrium.
• B) There is a recessionary gap of $0.8 trillion.
• C) There is a recessionary gap of $0.2 trillion.
• D) There is an inflationary gap of $1 trillion.

---

Definitions:

Interdependent

The condition of being mutually reliant on each other, where the actions of one party significantly affect the other.

Adaptive

The ability or quality of being able to adjust or change in response to new conditions or environments.

Situation-Trait Debate

A discussion in psychology that investigates whether human behavior is more influenced by situational factors or by enduring personality traits.

Five Factors

Often related to the "Big Five" personality traits model, which includes openness, conscientiousness, extraversion, agreeableness, and neuroticism.