An Economy in Which Actual GDP Is $10 Billion Below

question 48

Multiple Choice

An economy in which actual GDP is $10 billion below potential GDP

• A)is experiencing an expansionary gap
• B)will have the short run aggregate supply shifting outward,if the passive approach is correct
• C)will typically have the short-run aggregate supply curve shifting to the left
• D)will likely have falling prices but rising wages
• E)will experience stagflation (i.e.,rising prices and falling output)

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