Which of the Following Is True of a Contractionary Gap

question 89

Multiple Choice

Which of the following is true of a contractionary gap?

• A)It develops when the expected price level is less than the actual price level.
• B)In the long run,this gap will close when resource suppliers negotiate lower resource payments.
• C)It measures the amount by which actual output is greater than the economy's potential output.
• D)In the long run,this gap will close when the short-run aggregate supply curve shifts rightward.
• E)In the long run,this gap will close when the aggregate demand curve shifts rightward.

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