The SRAS Is Horizontal at a Price Level of 2

question 52

Multiple Choice

The SRAS is horizontal at a price level of 2.
-According to the AD-AS model,the economy depicted above has a short-run equilibrium output of ___________ and a(n) ___________ gap equal to ___________.

• A) 550;expansionary;50
• B) 600;recessionary;0
• C) 600;expansionary;50
• D) 650;expansionary;100
• E) 600;recessionary;100

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Definitions:

Salsa

a spicy sauce of tomatoes, onions, and chili peppers commonly used in Latin American cuisine.

Marginal Utility

The incremental enjoyment or advantage a consumer receives from consuming one more unit of a good or service.

Macaroni and Cheese

A popular dish made with macaroni pasta and a cheese-based sauce, often baked or otherwise prepared as comfort food.

Negative

Used to describe values less than zero, situations of decrease or loss, or aspects considered undesirable or harmful.