Suppose an Economy Is Operating with a Contractionary Gap

question 128

Multiple Choice

Suppose an economy is operating with a contractionary gap.In this case, policymakers would seek to move the economy

• A)back down the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• B)up the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• C)back down the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.
• D)up the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.

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Definitions:

Measurement

The process of determining the size, length, or amount of something using standard units.

Product Obsolescence

The process by which a product becomes outdated or no longer useful, often due to advances in technology or changes in consumer preferences.

External Adaptation

The process by which an organization adjusts and changes its strategies and operations in response to external environmental factors.

Internal Differentiation

The division of roles, responsibilities, and tasks within an organization or group to specialize and increase efficiency.