-Refer to the above figure. If the relevant aggregate demand curve is AD₂, what is the current economic situation?
A)inflationary gap
B)recessionary gap
C)equilibrium
D)overemployment

Name: -Refer to the above figure. If the relevant aggregate demand curve is AD₂, what is the current economic situation? A)inflationary gap B)recessionary gap C)equilibrium D)overemployment
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Question

-Refer to the above figure. If the relevant aggregate demand curve is AD₂, what is the current economic situation?
A)inflationary gap 
B)recessionary gap 
C)equilibrium 
D)overemployment

Quizplus · Accepted Answer

The aggregate demand curve AD₂ is below the potential output, indicating a recessionary gap.

-Refer to the Above Figure