In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. An inflationary gap exists
A) if the long-run aggregate supply curve is LAS1.
B) if the long-run aggregate supply curve is LAS2.
C) if the long-run aggregate supply curve is LAS3.
D) All of the above answers are correct.
A
Economics
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In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, deposits in the banking system can potentially increase by
A) $10. B) $100. C) $100 times the reciprocal of the required reserve ratio. D) $100 times the required reserve ratio.
Economics
If spending decreased by $400, and the GDP decreased $1,000 as a result, the MPC must be:
A. 0.60 B. 0.75 C. 4 D. 2.5
Economics