To achieve long-run equilibrium in an economy with a recessionary gap, output will ______ and the inflation rate will _____.

Question

To achieve long-run equilibrium in an economy with a recessionary gap, output will ______ and the inflation rate will _____.
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Solution 1

To achieve long-run equilibrium in an economy with a recessionary gap, the output will increase and the inflation rate will decrease.

Here's the step-by-step explanation:

  1. A recessionary gap occurs when the actual output in an economy is less than the potential output. This means that the econo Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
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Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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