When the economy is in equilibrium,________________.
a. there are increases in inventory
b. there are decreases in inventory
c. total expenditures equal total production
d. people want to buy more than will be produced
Suppose the economy's short-run equilibrium point is to the left of the National Real GDP. Which of the following is true?
a. The economy is in a recessionary gap.
b. The economy is in an inflationary gap.
c. The economy is in long-run equilibrium.
d. This situation is actually impossible, according to economic theory.