Use the Following to Answer Questions

question 55

Multiple Choice

Use the following to answer questions:
Figure: An Increase in Aggregate Demand
-(Figure: An Increase in Aggregate Demand) Refer to Figure: An Increase in Aggregate Demand. At the Y₂ level of real GDP:

• A) an inflationary gap equal to the sum of Y₂ and Y_P occurs.
• B) an inflationary gap equal to the difference between Y₂ and Y_P occurs.
• C) the solution at Y₂ is a long-run equilibrium.
• D) a recessionary gap equal to the difference between Y₂ and Y_P occurs.

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Definitions:

Hypergeometric Probability

A probability distribution used for calculating the odds of drawing a specific number of successes in a sample without replacement from a finite population.

Discrete Probability Distributions

Probability distributions that delineate the probabilities of outcomes for discrete random variables.

Hypergeometric Random Variable

A discrete random variable that represents the count of successful outcomes in a series of selections from a limited population where each selection is not returned to the pool.

Probability of Success

The likelihood that an event will occur as desired, often represented as a number between 0 and 1.