The figure below shows the price level,real GDP,and the potential output for an economy.According to those who favor an active approach to policy,once the expansionary gap is eliminated,the economy can attain equilibrium at:
Definitions:
Investing
The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.
Compounded Annually
The process where interest earned in one period is added to the principal sum and then interest in the next period is calculated on the new total.
Ordinary Annuity
A series of equal payments made at regular intervals, such as monthly or annually, with the payments occurring at the end of each period.
Investment Account
A financial account held by an investment dealer that enables individuals to purchase securities such as stocks, bonds, and mutual funds.
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