Which of the following can eliminate a recessionary GDP gap,ceteris paribus?
A)An increase in consumption expenditure.
B)A decrease in investment.
C)An increase in saving.
D)A decrease in government spending.

Question

Quizplus · Accepted Answer

An increase in consumption expenditure increases overall spending in the economy, leading to an increase in output and potentially eliminating a recessionary GDP gap. The other choices would decrease overall spending and potentially worsen the recessionary gap.

Which of the Following Can Eliminate a Recessionary GDP Gap,ceteris