Which of the following statements is true?
A) A recession occurs when the expenditure line shifts down the 45-degree line.
B) A recession occurs whenever potential GDP is less than real GDP at the point of spending balance.
C) A recession occurs whenever income and expenditures are not equal.
D) A recession occurs when the expenditure line crosses the 45-degree line at a level of income less than potential GDP.
E) The expenditure line cannot be used to identify recessions or expansions.
Correct Answer:
Verified
Q143: Suppose most European economies are in a
Q144: Which of the following is true?
A)Potential GDP
Q145: The spending multiplier is the ratio of
Q146: Sketch the 45-degree line and the expenditure
Q147: Suppose that the expenditure line initially intersects
Q149: Exhibit 23-6 Q150: Suppose the economy is booming and many Q151: The Keynesian multiplier measures Q152: Describe what happens to the aggregate expenditure Q153: Exhibit 23-6 
A)both the short-run and
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