Use the Following to Answer Questions

question 106

Multiple Choice

Use the following to answer questions .
Exhibit: Aggregate Demand and Aggregate Supply at Different Price Levels

-(Exhibit: Aggregate Demand and Aggregate Supply at Different Price Levels) The table shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion. 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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