If the equilibrium level of real Gross Domestic Product (GDP) is greater than the full-employment real Gross Domestic Product (GDP) consistent with the position of the economy's long-run aggregate supply (LRAS) curve, then the difference between full-employment real Gross Domestic Product (GDP) and current equilibrium real Gross Domestic Product (GDP) is

A. an inflationary gap.
B. the level of output consistent with natural unemployment.
C. a recessionary gap.
D. an aggregate demand shock.


Answer: A

Economics

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Economics