If the Economy Is on the Flat Portion of the AS Curve

question 98

Multiple Choice

If the economy is on the flat portion of the AS curve,

• A) there is little crowding out of planned investment.
• B) there is almost complete crowding out of planned investment.
• C) consumption, but not government spending, crowds out planned investment.
• D) government spending, but not consumption, crowds out planned investment.

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Definitions:

Macroeconomics

A branch of economics that studies how the aggregate economy behaves, focusing on indicators such as GDP, unemployment rates, and inflation.

Descriptive Economics

The branch of economics focused on describing the components of the economy and how they function, without making judgments about them.

Institutional Economics

A branch of economics focusing on the role of institutions in shaping economic behavior.

Understand Society

The comprehensive grasp of how social structures, relationships, and behaviors function within a community or population.