Aggregate Expenditures
d
45°-
0
A
B
C
GDP
AE₁
h
AE2
g
AE3
Refer to the diagram. If the full-employment level of GDP is B and aggregate
expenditures are at AE3, the
O inflationary expenditure gap is ed.
O recessionary expenditure gap is ed.
O inflationary expenditure gap is BC.
O recessionary expenditure gap is BC.