Suppose the AD Curve and the SRAS Curve Intersect to the Right

question 140

Multiple Choice

Suppose the AD curve and the SRAS curve intersect to the right of the LRAS curve.Which of the following is true?

• A) The economy is in a recessionary gap.
• B) The economy is in an inflationary gap.
• C) The economy is in a long-run equilibrium.
• D) This situation is actually impossible.

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