Figure 13-3 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that:Figure 13-3
A)the economy is operating with an inflationary gap.
B)the economy is operating with a recessionary gap.
C)the economy is operating at long-run equilibrium.
D)tax rates are falling in the economy.
E)the government should increase its spending in the economy.

Question

Figure 13-3 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that:Figure 13-3 
A)the economy is operating with an inflationary gap. 
B)the economy is operating with a recessionary gap. 
C)the economy is operating at long-run equilibrium. 
D)tax rates are falling in the economy. 
E)the government should increase its spending in the economy.

Quizplus · Accepted Answer

The Answer of Figure 13-3 shows the short-run macroeconomic equilibrium of an economy at Point A. In the figure, Point A suggests that:Figure 13-3 
A)the economy is operating with an inflationary gap. 
B)the economy is operating with a recessionary gap. 
C)the economy is operating at long-run equilibrium. 
D)tax rates are falling in the economy. 
E)the government should increase its spending in the economy.

Figure 13-3 Shows the Short-Run Macroeconomic Equilibrium of an Economy