Based on the Figure Below

question 160

Multiple Choice

Based on the figure below. An economy in short-run equilibrium at point A has a(n) _______ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ____ or the central bank could intervene with monetary easing establishing the long-run equilibrium at point ____.

• A) recessionary; B; C
• B) recessionary; C; B
• C) expansionary; C; B
• D) expansionary; B; C

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Definitions:

Virtual Dictatorship

A form of government in which power is effectively concentrated in the hands of an individual or a small group, without the formal title of dictator, often lacking checks and balances or democratic processes.

Strictly Constitutional

Adhering rigidly to the Constitution, often implying a conservative or literal interpretation of this foundational document.

Self-Immolation

The act of setting oneself on fire as a form of protest or sacrifice, often associated with political or religious motives.

Thich Quang Duc

A Vietnamese Mahayana Buddhist monk who self-immolated in 1963 in protest against the persecution of Buddhists by the South Vietnamese government.