The following question are based on the following diagram:
-Which of the following events would correct the condition shown?
A) a decrease in private sector spending
B) an increase in the money supply by the government
C) an increase in government spending accompanied by a tax cut
D) a decrease in potential output because of a natural disaster
E) a decrease in the price level through the imposition of wage and price controls
Correct Answer:
Verified
Q16: The government may attempt to reduce unemployment
Q17: A recessionary gap
A) exists when actual spending
Q18: The following question are based on the
Q19: One reason NOT to wait for wage
Q20: In a simple Keynesian model,an increase in
Q22: The following question are based on the
Q23: If equilibrium GDP exceeds potential GDP
A) potential
Q24: An inflationary gap
A) exists when actual spending
Q25: If the economy is operating on the
Q26: When the equilibrium level of output in
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