-In the above figure, the short- run equilibrium depicts an economy
A) producing at full employment.
B) with an inflationary gap.
C) with a recessionary gap.
D) None of the above answers are correct.

Question

-In the above figure, the short- run equilibrium depicts an economy
A) producing at full employment. 
B) with an inflationary gap. 
C) with a recessionary gap. 
D) None of the above answers are correct.

Quizplus · Accepted Answer

A recessionary gap occurs when an economy's actual output is less than its potential output, indicating underutilization of resources and unemployment.

-In the Above Figure, the Short- Run Equilibrium Depicts an Economy