If the SRAS and AD Curves Intersect at an Output

question 108

Multiple Choice

If the SRAS and AD curves intersect at an output level to the left of the LRAS curve,

• A) there is an expansionary gap,with Y > Y*.
• B) there is a recessionary gap,with Y < Y*.
• C) there is an expansionary gap,with Y < Y*.
• D) there is a recessionary gap,with Y > Y*.
• E) there is no output gap and Y = Y*.

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Definitions:

Voucher System

An accounting system that involves preparing and using vouchers—documents that authorize and detail the payment of a liability to a supplier.

Cash Receipts

The total amount of cash and cash equivalents received by a company during a given period, including sales, refunds, and other cash inflows.

Liabilities

Financial obligations or debts that a company owes to others, which are expected to be settled through the transfer of assets, provision of services, or other economic benefits.

Income Statement Account

A financial account that shows the company's revenues, expenses, and net income over a specific period.