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AP® Macroeconomics

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Moderate

Inflationary Gap Represented on AD-AS Graph

APMACR-1E9LJ1

An aggregate demand-aggregate supply graph representing the economy with an inflationary gap is illustrated by

A

a vertical long-run aggregate supply curve to the left of the intersection of the aggregate demand curve and the short-run aggregate supply curve.

B

a vertical long-run aggregate supply curve to the right of the intersection of the aggregate demand curve and the short-run aggregate supply curve.

C

an upsloping long-run aggregate supply curve to the right of the intersection of the aggregate demand curve and the short-run aggregate supply curve.

D

an upsloping long-run aggregate supply curve to the left of the intersection of the aggregate demand curve and the short-run aggregate supply curve.

E

a long-run aggregate supply curve that intersects the aggregate demand curve and the short-run aggregate supply curve at equilibrium.