Asked by Ashley Kenny on May 13, 2024
Verified
A recessionary gap is usually closed in the long run by a(n) :
A) rightward shift of the short-run aggregate supply curve.
B) leftward shift of the short-run aggregate supply curve.
C) rightward movement along a fixed short-run aggregate supply curve.
D) decrease in aggregate demand.
E) leftward movement along a fixed short-run aggregate supply curve.
Recessionary Gap
A situation where actual economic output is lower than the output that would be achieved at full employment, indicating underutilized resources.
Short-Run Aggregate Supply Curve
A graphical representation showing the relationship between the total production of goods and services and the price level for output in the short-run, acknowledging some input prices are fixed.
- Identify the mechanisms of adjusting to long-run equilibrium, including recessionary and expansionary gaps.
Verified Answer
Learning Objectives
- Identify the mechanisms of adjusting to long-run equilibrium, including recessionary and expansionary gaps.
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