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Refer to the Graph Shown

question 118

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Refer to the graph shown. In the graph, an inflationary gap exists if the price level is: Refer to the graph shown. In the graph, an inflationary gap exists if the price level is:   A) P<sub>0</sub> and the aggregate demand curve is AD<sub>0</sub>. B) P<sub>0</sub> and the aggregate demand curve is AD<sub>1</sub>. C) P<sub>1</sub> and the aggregate demand curve is AD<sub>0</sub>. D) P<sub>1</sub> and the aggregate demand curve is AD<sub>1</sub>.


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