If Potential Output Exceeds Actual Output, the Economy

question 153

Multiple Choice

If potential output exceeds actual output, the economy:

• A)is experiencing an inflationary gap.
• B)is experiencing a recessionary gap.
• C)may be in a long-run equilibrium but is not in a short-run equilibrium.
• D)is in neither a short-run nor long-run equilibrium.

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