If aggregate demand decreases and neither short-run nor long-run aggregate supply changes, thenA.the price level increases in the short-run and decreases in the long-run.B.there is an inflationary gap.C.there is a recessionary gap.D.in the long run, the
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When an economy has a positive output gap, which of the following statements is true? a. Real GDP is less than Potential GDP; the unemployment rate exceeds the natural rate of unemployment; and the inflation rate tends to fall. b. Real GDP is greater than ...
If injections exceed leakages:b. the price level will rise. The circular flow is usually a closed system. Injections would add to the amount of the...
There is some disagreement as to wheth An earthquake destroyed 50 percent of the Moldavian manufacturing base. The Moldavian government decided to use a contractionary fiscal policy to counter the effects of the earthquake on the economy. The use of the ...
Core inflation can be brought down again, but it isn’t going to happen by magic. Most likely it will take a period of sustained weakness in demand growth, a period of a negative output gap, and – as part of that – a period when the unemployment is above the medium-term sustainable...
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If nominal GDP is $6,039 billion and the price index for the CPI is 110.1, given this information what would be real GDP? A. $6,648 billion B. $6,039 billion C. $5,485 billion D. ...
Real GDP = $1500 Potential GDP = $1200 MPS = 0.333 This is a(n) ___ (recessionary, inflationary) gap which can be closed by ___ (increasing, decreasing) government spending by $ ___. True or False: 1. GDP is the value of all goods pu...