Based on the figure below, an economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing and the long-run equilibrium would be at point ________. 

A. expansionary; C; B
B. recessionary; B; C
C. expansionary; B; C
D. recessionary; C; B


Answer: A

Economics

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