IMG_1731.jpg - 39 Refer to the figure above At point B the economy has A a recessionary gap with real GDP less than potential GDP B a recessionary gap

IMG_1731.jpg - 39 Refer to the figure above At point B the...

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Unformatted text preview: 39) Refer to the figure above. At point B the economy has A) a recessionary gap with real GDP less than potential GDP. B) a recessionary gap with real GDP in excess of potential GDP. C) an inflationary gap with real GDP in excess of potential GDP. an inflationary gap with real GDP less than potential GDP. E) neither an inflationary gap nor a recessionary gap. 40) Canadian businesses have an increase in their expected future profits. Starting from a position of long-run equilibrium, what effect does this event have on Canada's economy in the short run? A) Real GDP increases and the price level rises. B) Real GDP decreases and the price level falls. C) Real GDP increases and the price level falls. D) Real GDP decreases and the price level rises. E) There is no change in either real GDP or the price level....
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