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If an Economy Adjusts to Potential GDP Accompanied by a Rising

Question 36

Multiple Choice

If an economy adjusts to potential GDP accompanied by a rising price level and a falling output level,


A) all of the following are correct
B) an active approach to correcting a contractionary gap is being used
C) an active approach to correcting an expansionary gap is being used
D) a passive approach to correcting a contractionary gap is being used
E) a passive approach to correcting an expansionary gap is being used

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