-Refer to the Graph in the Exhibit

question 55

Multiple Choice

-Refer to the graph in the exhibit.Consider income level Y₁.What type of gap is this?  

• A) a recessionary gap
• B) an expansionary gap
• C) a potential gap
• D) an actual gap

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Definitions:

Quantity Demanded

The cumulative total of a good or service that customers intend and can afford to buy at a set price level.

Quantity Supplied

The total amount of a product that producers are willing and able to sell at a given price in a given time period.

Surplus

An economic situation where the quantity of goods supplied is greater than the quantity demanded.

Shortage

A situation in an economy where the demand for a product or service exceeds the supply available at a specific price.