Chapter 13 Question 7

Suppose that the economy is shown to the right.

This economy is currently experiencing

A.

crowding out.

B.

deflation.

C.

a recessionary gap.

D.

an inflationary gap.

Your answer is correct.

Using the line drawing tool?, draw and label the fiscal policy correction that would bring the economy to full employment GDP. Properly label this line.

Carefully follow the instructions?above, and only draw the required objects.??