The Diagram Below Shows an AD/AS Model for a Hypothetical

question 28

Multiple Choice

The diagram below shows an AD/AS model for a hypothetical economy which is initially in a short-run equilibrium at point A. FIGURE 24-6 Refer to Figure 24-6.In the initial short-run equilibrium,there is ________ output gap of ________,but this gap could be closed by a ________.

• A)a recessionary; 100; fiscal contraction
• B)a recessionary; 200; fiscal expansion
• C)a recessionary; 200; fiscal contraction
• D)an inflationary; 100; fiscal contraction
• E)an inflationary; 200; fiscal expansion

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Definitions:

Discriminative Action

Actions or behaviors that unfairly treat or favor individuals or groups over others based on biases or prejudices.

Bona Fide

A genuine, authentic condition or quality without intent of deceit.

Strategic Assets

Valuable resources owned by a company that are instrumental in maintaining its competitive edge and achieving long-term goals.

Organizational Success

The achievement of the objectives and goals set by a business or institution, often measured by financial performance, market share, or satisfaction levels among stakeholders.