If the economy in the short run is experiencing a recessionary gap,we are likely to see
A)severe and widespread labour shortages.
B)quickly rising output prices.
C)an increase in the number of workers receiving employment-insurance benefits.
D)the number of employment-insurance recipients the lowest ever.
E)consumers optimistic about the future.

Question

Quizplus · Accepted Answer

A recessionary gap implies that aggregate demand is less than aggregate supply. This leads to lower output, lower employment, and usually rising unemployment rates. As a result, more workers are likely to be laid off and receive unemployment benefits.

If the Economy in the Short Run Is Experiencing a Recessionary