After reviewing Exhibit 3 in this chapter, explain why recessionary gaps occur only in the short run
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After reviewing Exhibit 3 in this chapter, explain why recessionary gaps occur only in the short run and only when the actual price level is below what was expected.
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Price level 110 105 100 0 Lit d I I Potential output LRAS T a 4D 13.8 14.0 Recessionary gap SRAS 110 AD" SRAS 100 Real GDP (trillions of dollars)
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In the long run the actual and expected price levels equal one another wh...View the full answer
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Related Book For
Economics A Contemporary Introduction
ISBN: 9781305505469
11th Edition
Authors: William A. McEachern
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