Macro Economics Help !! http://imageshack.us/photo/my-images/822/30697502.png/ 1

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Macro Economics Help !!
http://imageshack.us/photo/my-images/822/30697502.png/

1/ (Figure: Inflationary and Recessionary Gaps) In Panel (a), the intersection of SRAS with AD indicates:
A. an economy experiencing a recessionary gap.
B. an economy experiencing an inflationary gap.
C. that the economy is in long-run equilibrium.
D. that the economy has an unusually low unemployment rate.

2/ (Figure: Inflationary and Recessionary Gaps) In Panel (b), the level of real GDP represented by Yp:
A) is potential output for this economy.
B) indicates that the economy is experiencing an inflationary gap.
C) indicates that the economy is experiencing a recessionary gap.
D) would be associated with considerable unemployment.

3/ (Figure: Inflationary and Recessionary Gaps) In Panel (b), the intersection of AD with SRAS indicates:
A) a short-run equilibrium.
B) a long-run equilibrium.
C) that the economy needs policies to reduce unemployment.
D) that the economy is at full employment.

Thanks for the help !!

Explanation / Answer

1A. an economy experiencing a recessionary gap.

2. A) is potential output for this economy.

3.A) a short-run equilibrium..

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