Refer to the accompanying figure.
An economy is currently in long-run equilibrium at point B, at an inflation rate of ?', which is too high for to sustain economic growth. If an anti-inflationary policy is enacted, the economy will be in short-run equilibrium at point ________ creating ________ gap.
A. A; an expansionary
B. D; an expansionary
C. D; a recessionary
D. A; a recessionary
Answer: D
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