The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. Y* AS 100 80 E 60 AD 650 700 800 1000 Real GDP Refer to the figure above. In the initial short-run equilibrium, there is but this gap could be closed by a output gap of a recessionary; 200; fiscal expansion. a recessionary; 100; fiscal contraction. an inflationary; 100; fiscal contraction a recessionary; 200; fiscal contraction Price Level B.
The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. Y* AS 100 80 E 60 AD 650 700 800 1000 Real GDP Refer to the figure above. In the initial short-run equilibrium, there is but this gap could be closed by a output gap of a recessionary; 200; fiscal expansion. a recessionary; 100; fiscal contraction. an inflationary; 100; fiscal contraction a recessionary; 200; fiscal contraction Price Level B.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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