Figure 5-1

-Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred
A)between years 1 and 2.
B)between years 2 and 3.
C)between years 3 and 4.
D)after year 4.

Question

Figure 5-1
​ 
-Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred
A)between years 1 and 2. 
B)between years 2 and 3. 
C)between years 3 and 4. 
D)after year 4.

Quizplus · Accepted Answer

The recession occurred between years 2 and 3, as that is where the actual output dips below potential output.

Figure 5-1 ​

Figure 5-1