Use the Following to Answer Questions

question 7

Multiple Choice

Use the following to answer questions:
-(Figure: Fiscal Policy Choices) Refer to Figure: Fiscal Policy Choices. In panel (a) , the economy is initially at output level Y₁ and there is:

• A) an inflationary gap.
• B) a recessionary gap.
• C) equilibrium at full employment.
• D) no gap.

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Definitions:

Quotients

The results of dividing one quantity by another.

Ratios

A mathematical expression that compares two or more numbers, showing the relative size of one quantity to another.

Totals

The sum or aggregate amount resulting from the addition of individual elements, numbers, or variables.

Relative Frequency

The ratio of the absolute frequency of a particular value to the total number of data values in a dataset.