In a diagram of aggregate demand and supply curves,the AD shortfall is measured as the
A) Vertical distance between the equilibrium price and the price at which the aggregate demand would intersect aggregate supply at full employment.
B) Horizontal distance between the equilibrium output and the full-employment output.
C) Horizontal distance between the aggregate demand curve necessary for full employment and the aggregate demand curve that intersects AS at the equilibrium price.
D) Vertical distance between the recessionary GDP gap and the inflationary GDP gap.
Correct Answer:
Verified
Q22: To eliminate an AD shortfall of $120
Q23: The total change in aggregate spending generated
Q24: The "naïve" Keynesian model is unrealistic because
Q25: The general formula for calculating the desired
Q26: If the multiplier equals 2 and the
Q28: Ceteris paribus,if the AD shortfall equals $600
Q29: To eliminate an AD shortfall of $100
Q30: Assume the MPC is 0.80.The change in
Q31: The general formula for computing the desired
Q32: The recessionary GDP gap will differ from
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents