A Recessionary Gap Will Be Eliminated Because There Is _____

As an inflationary gap self-corrects, the equilibrium price level _____ and the equilibrium real output _____. A) rises; decreases B) rises; increases C) falls; decreases D) falls; increases

Suppose that the economy is in long-run macroeconomic equilibrium and aggregate demand increases. As the economy moves to short-run macroeconomic equilibrium, there is a(n) _____ gap with _____. A) recessionary; high inflation B) recessionary; low inflation C) inflationary; high unemployment D) inflationary; low unemployment