Use the Following to Answer Questions

question 2

Multiple Choice

Use the following to answer questions:
-(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. At E₂, the economy:

• A) is in a long-run equilibrium.
• B) has an inflationary gap.
• C) has a recessionary gap.
• D) has high unemployment.

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Definitions:

Hydroelectric Plants

Facilities that produce electricity by using water flow to drive turbines, often located at dams in rivers or streams.

Switzerland

A country in Central Europe known for its mountainous landscape, neutral policy, and high standard of living.

Norway

A Scandinavian country known for its mountains, fjords, and deep coastal inlets, as well as a high standard of living and strong emphasis on environmental conservation.

Passive Solar Design

A design philosophy that utilizes a building's orientation, window placement, and construction materials to minimize energy use by capturing and distributing solar energy naturally.