Suppose Real GDP Exceeds Potential Real GDP

question 201

Multiple Choice

Suppose real GDP exceeds potential real GDP. If the government decreases its expenditures on goods and services, then real GDP _________and the price level_________ .

• A) increases; rises
• B) decreases; falls
• C) decreases; rises
• D) increases; falls

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Definitions:

Narcotics

Are substances that can lead to dependence and have pain relieving and sleep-inducing properties, often used in medical contexts but can be misused.

Controlling Pain

The process of managing or reducing the discomfort caused by acute or chronic pain through various techniques and treatments.

Effective Methods

Techniques or strategies that have been proven to lead to desired outcomes or goals efficiently.

Stimulant

A type of drug that increases activity in the nervous system, leading to increased alertness, attention, and energy.