If the Equilibrium Output Is Below Potential Output

question 20

Multiple Choice

If the equilibrium output is below potential output:

• A) the price level decreases.
• B) unemployment is constant.
• C) aggregate demand increases.
• D) inflation usually rises.

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Definitions:

Flight of Ideas

A rapid flow of thought, often manifesting as a symptom in conditions like bipolar disorder, characterized by rapid topic changes.

Echolalia

The repetition of words or phrases spoken by others, a speech pattern often found in people with autism and certain other conditions.

Clanging

A pattern of speech where the choice of words is governed by sound rather than meaning, typically noticed in psychiatric conditions.

Word Salad

A speech disorder characterized by the random juxtaposition of words that lack meaningful connection, typically seen in severe psychiatric conditions such as schizophrenia.