Refer to the Diagram

question 232

Multiple Choice

Refer to the diagram.If the full-employment level of GDP is B and aggregate expenditures are at AE₁, the:

• A)inflationary expenditure gap is hg.
• B)recessionary expenditure gap is BC.
• C)inflationary expenditure gap is zero.
• D)inflationary expenditure gap is ed.

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