If an Economy Is Operating at Its Potential Output Level

question 158

True/False

If an economy is operating at its potential output level, a change in aggregate demand or short-run aggregate supply will induce an inflationary or a recessionary gap.

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Definitions:

Sins of Commission

Errors or wrongdoings resulting from action taken, as opposed to inaction or omission.

Sins of Omission

Failures to act that result in negative outcomes or harm, often discussed in ethical or moral contexts.

Risky Shifts

A phenomenon observed in group decision-making processes, where groups tend to make riskier decisions than individuals would when alone.

Original Experiments

Experimental studies or research designed to test hypotheses by manipulating variables in a controlled environment for the first time.