If the Short-Run Macroeconomic Equilibrium Occurs with Real GDP Less

question 23

Multiple Choice

If the short-run macroeconomic equilibrium occurs with real GDP less than Y*,the economy is

• A)at its full-employment level of output.
• B)experiencing a recessionary gap.
• C)experiencing an inflationary gap.
• D)threatened with an acceleration of inflation.
• E)operating at full capacity.

---

Definitions:

Material Breach

A significant failure to perform a part of a contract that permits the other party to either demand performance or terminate the agreement.

Buyer's Obligations

The duties and responsibilities a buyer assumes in a transaction, such as paying the purchase price and complying with the terms of the agreement.

Contract

An agreement between two or more parties creating enforceable obligations.

Substituted Contracts

New agreements that replace and fulfill the obligations of a prior contract, agreed upon by all parties involved.