Exhibit 11-5 -If the Economy Is at Point M in Exhibit 11-5

question 127

Multiple Choice

Exhibit 11-5
-If the economy is at point M in Exhibit 11-5,

• A)the actual price level is lower than expected with a $200 billion expansionary gap
• B)the actual price level is lower than expected with a $200 billion contractionary gap
• C)the actual price level is higher than expected with a $200 billion contractionary gap
• D)the short-run supply curve will shift to SRS₁₀₉ and the expansionary gap will be eliminated
• E)the economy is in equilibrium in the short run and the long run

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