If real GDP at full employment is $5 billion while current GDP is $6 billion, a(n) _____ exists, and will require a _____ in spending to bring the economy back to full employment.
A) recessionary gap; increase
B) recessionary gap; decrease
C) inflationary gap; increase
D) inflationary gap; decrease
Correct Answer:
Verified
Q6: When consumer confidence falls in an economy,
Q7: Which of the following did classical economists
Q8: In the Keynesian aggregate expenditure model, prices
Q9: What does the "paradox of thrift" say?
A)
Q10: If the marginal propensity to save is
Q12: What is the main claim of the
Q13: If MPC = 0.6, what is the
Q14: What does the 45-degree line in the
Q15: How does the spending multiplier compare between
Q16: What are the components of aggregate expenditures?
A)
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