Question: Starting from afull-employment equilibrium, an increase in aggregate demand______, and creates______ gap. A. increases real GDP abovepotential; a recessionary B. decreases real GDP below potentialGDP;

Starting from afull-employment equilibrium, an increase in aggregate demand______, and creates______ gap.

A.

increases real GDP abovepotential;

a recessionary

B.

decreases real GDP below potentialGDP;

a recessionary

C.

increases real GDP above potentialGDP;

an inflationary

D.

decreases real GDP below potentialGDP;

an inflationary

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