![SOLVED: 5) The economy is in short-run macroeconomic equilibrium at point E in the accompanying diagram. Based on the diagram, answer the following questions. Aggregate price level LRAS SRAS1 P. AD Y1 SOLVED: 5) The economy is in short-run macroeconomic equilibrium at point E in the accompanying diagram. Based on the diagram, answer the following questions. Aggregate price level LRAS SRAS1 P. AD Y1](https://cdn.numerade.com/ask_images/e71d6203afa043239e5f88eda4e04f12.jpg)
SOLVED: 5) The economy is in short-run macroeconomic equilibrium at point E in the accompanying diagram. Based on the diagram, answer the following questions. Aggregate price level LRAS SRAS1 P. AD Y1
![SOLVED: 'a) Is the economy facing an inflationary or a recessionary gap?b) What policies can the government implement that might bring the economy back to long-run macroeconomic equilibrium? Illustrate with a diagram.c) SOLVED: 'a) Is the economy facing an inflationary or a recessionary gap?b) What policies can the government implement that might bring the economy back to long-run macroeconomic equilibrium? Illustrate with a diagram.c)](https://cdn.numerade.com/ask_images/61589bfed7854b4890d6ad512c7d9a76.jpg)
SOLVED: 'a) Is the economy facing an inflationary or a recessionary gap?b) What policies can the government implement that might bring the economy back to long-run macroeconomic equilibrium? Illustrate with a diagram.c)
![Suppose that the economy is currently in short-run macroeconomic equilibrium with actual GDP $400 million above potential GDP. (a) Depict this situation using AD-AS, being sure to label all curves an Suppose that the economy is currently in short-run macroeconomic equilibrium with actual GDP $400 million above potential GDP. (a) Depict this situation using AD-AS, being sure to label all curves an](https://homework.study.com/cimages/multimages/16/rsz_as35793867777921266809.jpg)
Suppose that the economy is currently in short-run macroeconomic equilibrium with actual GDP $400 million above potential GDP. (a) Depict this situation using AD-AS, being sure to label all curves an
![22.3 Recessionary and Inflationary Gaps and Long-Run Macroeconomic Equilibrium – Principles of Economics 22.3 Recessionary and Inflationary Gaps and Long-Run Macroeconomic Equilibrium – Principles of Economics](https://open.lib.umn.edu/app/uploads/sites/180/2016/05/7b62fdbf653dfcb85fd08b78b15b6275.jpg)