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.

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