An expansionary gap generally creates inflationary pressure in an economy

In the above figure, the relationship between income and expenditures is

A) positive. B) negative. C) independent. D) random.

In the above figure, if aggregate demand does not change, the short-run equilibrium will

A) eventually adjust to a long-run equilibrium with a higher price level. B) not adjust on its own. C) eventually adjust to a long-run equilibrium with a lower price level. D) None of the above answers are correct.