Starting from potential output, if firms become more optimistic about the future and decide to increase their investment in new capital, then this will generate a(n) ________ gap and inflation will ________.
A) recessionary; increase
B) recessionary; decrease
C) expansionary; decrease
D) expansionary; increase
Correct Answer:
Verified
Q70: Graphically the intersection of the aggregate demand
Q71: Graphically short-run equilibrium occurs at the intersection
Q72: When a recessionary gap exists, actual output
Q73: At long-run equilibrium inflation _ and output
Q74: When no output gap exists actual output
Q76: A vertical line showing an economy's potential
Q77: The long-run aggregate supply line is:
A)downward sloping.
B)vertical
Q78: At short-run equilibrium inflation _ and output
Q79: Starting from potential output, if consumer confidence
Q80: The short-run aggregate supply curve shows _
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